At 4 Units of Output in Table 21

question 44

Multiple Choice

$$\begin{array}{l}\begin{array} { | c | c | } \hline \begin{array} { c } \text { Output } \\\text { (Units per Day) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (Dollars per Day) }\end{array} \\\hline 0 & 16 \\\hline 1 & 30 \\\hline 2 & 42 \\\hline 3 & 58 \\\hline 4 & 78 \\\hline\end{array}\\\text { Table 21.4 }\end{array}$$ At 4 units of output in Table 21.4, the total variable cost is

• A) $5.00.
• B) $20.00.
• C) $19.50.
• D) $62.00.

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Definitions:

Overhead Cost

All ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and salaries of non-production staff.

Activity Rates

Are used in activity-based costing to allocate costs to products or services based on the activities required for their production or delivery.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, improving accuracy in product costing.

Overhead Cost

Expenses related to the day-to-day running of a business that are not directly linked to a specific product or service but are necessary for the business to operate.