The Markup Over Cost Under the Absorption Costing Approach Would

question 17

True/False

The markup over cost under the absorption costing approach would decrease if selling and administrative expenses increase, holding everything else constant.

---

Definitions:

Marginal Revenue

The surplus revenue acquired from the sale of one more unit of a good or service.

Profit Maximizing Output

The level of production at which a firm achieves the highest possible profit, determined by the point where marginal cost equals marginal revenue.

Demand Curve

A graphic representation showing how the quantity demanded of a good or service varies with its price.

Marginal Cost

The hike in complete costing that comes with the fabrication of an additional unit of a good or service.