Management Accountants Use the Cost Hierarchy to First Calculate the ________

question 81

Multiple Choice

Management accountants use the cost hierarchy to first calculate the ________.

• A) labor costs of each product and then they compute material costs
• B) overhead costs of each product and then they compute prime costs
• C) factory costs of each product and then they compute labor costs
• D) total costs of each product and then they compute per-unit costs

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Definitions:

Average Fixed Costs

Production's steady costs, unchanged by the amount of production, divided across the output quantity.

Total Variable Costs

The overall expenses that vary directly with the level of production output, such as raw materials and labor.

Marginal Cost

The escalation of full cost associated with manufacturing an additional unit of a good or service.

Output

The amount of products or services that a company, sector, or nation generates over a specific period of time.