Which of the Following Levels of Costs Should Not Be

question 22

Multiple Choice

Which of the following levels of costs should not be allocated to products for decision-making purposes?

• A)Unit-level activities.
• B)Batch-level activities.
• C)Product-level activities.
• D)Organization-sustaining activities.

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Definitions:

Returns to Scale

The change in output resulting from a proportional change in all inputs, where increases can be constant, increasing, or decreasing.

Long-Run Average Cost

The average cost per unit of output where all inputs, including capital, are variable in the long term.

Marginal Cost

The costs entailed in generating an extra unit of a product or service.

Economies of Scale

The reduction in per-unit production costs resulting from an increase in the scale of production.