Select the Appropriate Cost Behaviour for the Following Costs Incurred

question 22

Multiple Choice

Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer.
-Cost of gear shifters

• A)Variable
• B)Fixed

---

Definitions:

Machine-Hours

A measure of the amount of time a machine is operated.

Direct Labor-Hours

Direct Labor-Hours refer to the total hours worked by employees who are directly involved in the production process, affecting the cost of goods.

Predetermined Overhead Rate

A rate used in costing to allocate estimated overhead costs to products or job orders based on a predetermined expense and activity level.

Job-Order Costing System

A costing method that assigns costs to specific jobs or batches, used when products or services are distinctly different.