Costs That Remain Constant Over a Range of Production and Then

question 27

Multiple Choice

Costs that remain constant over a range of production and then abruptly change include:

• A)unexpected costs.
• B)step-variable costs.
• C)semifixed costs.
• D)curvilinear costs.

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Definitions:

Fixed Manufacturing Overhead

The portion of fixed costs that is directly associated with the production process, including salaries of managers and factory maintenance.

Predetermined Overhead Rate

An estimated charge used for cost allocation within a budget or accounting period, calculated by dividing the estimated manufacturing overhead costs by an allocation base.

Machine-Hours

A measure of production output or work, indicating the total time machines are operated.

Bill Of Materials

A document that shows the quantity of each type of direct material required to make a product.