Which of the Following Statement Is(are)true? (A)Unused Capacity Costs Incurred

question 134

Multiple Choice

Which of the following statement is(are) true? (A) Unused capacity costs incurred for the benefit of a company's customers (e.g. ,meet seasonal demands) should be assigned to the customers that require (use) the excess capacity.(B) In general,managerial decisions affecting capacity-level costs and activities also affect volume-level,batch-level,and product-level cost and activities.

• A) Only A is true.
• B) Only B is true.
• C) Both A and B are true.
• D) Neither A nor B is true.

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Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy within a particular period.

Economic Profit

The difference between total revenue and total economic costs (including both explicit and implicit costs), reflecting the true economic performance of a company.

Purely Competitive

An economic model where numerous small businesses operate, offering identical products, with unrestricted market entry and exit, and complete transparency of information.

Short Run

A period in which at least one input in the production process is fixed and cannot be varied to influence output.