Process Value Analysis (PVA)identifies All Activities of a Production And/or

question 5

Multiple Choice

Process value analysis (PVA) identifies all activities of a production and/or assembly operation for the purpose of

• A)preparing budgets based on activity centers.
• B)determining the value of the process.
• C)replacing cost drivers used in cost assignment analyses with activities.
• D)relating cost assignment to the activities that caused the cost to be incurred.

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Definitions:

Complements

Goods that are often consumed together, such that an increase in demand for one leads to an increase in demand for the other.

Substitutes

Goods or services that can replace each other in use or consumption, such that an increase in the price of one leads to an increase in demand for the other.

Marginal Revenue

Marginal revenue is the additional revenue that a firm gains from selling one more unit of a good or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.