If Marginal Costs of Production Are Greater Than Marginal Benefits

question 100

Multiple Choice

If marginal costs of production are greater than marginal benefits of production:

• A)costs will eventually decrease.
• B)too much of the good is being produced.
• C)more of the good should be produced.
• D)not all costs are being considered.

Understand the concept and calculation of overhead application rates based on direct labor hours.

Understand the selection of activity bases in automated manufacturing operations including machine hours.

Calculate overhead costs applied to a specific job based on varying activity bases.

Understand the application of overhead based on direct labor costs and calculate total manufacturing costs.

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Definitions:

Perpetual Inventory System

An approach to inventory accounting where transactions are immediately documented through computerized point-of-sale systems and software designed for managing enterprise assets.

Inventory Shrinkage

The decrease in product inventory from the time of acquisition from a supplier to the moment it's sold to a customer, frequently as a result of theft, damage, or mistakes.

Credit Memo

A document issued to a buyer, crediting them for part of a sale due to a return or overcharge.

Sales Invoice

A document issued by a seller to a buyer, detailing a transaction's products, quantities, and agreed prices for products or services the seller has provided.