Many Automated Processes Generate Costs That Have No Cause-And-Effect Relationship

question 96

True/False

Many automated processes generate costs that have no cause-and-effect relationship with volume-based cost drivers.

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Definitions:

Marginal Productivity Theory

An economic theory that suggests the price of a factor of production (like labor or capital) is determined by its marginal productivity, or the additional output generated by one more unit of the factor.

Total Output

The total quantity of goods and services produced by an economy, a company, or a sector during a specific period.

Marginal Revenue Productivity

The additional revenue a company generates when it increases the production input by one additional unit.