Variable Cost

question 113

Multiple Choice

Variable cost

• A) depends on the number of units produced.
• B) plus marginal cost equals fixed cost.
• C) is equal to total cost in deterministic models.
• D) is the same as average cost.

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Definitions:

Processing Batches

The grouping of similar items or transactions for processing at the same time to increase efficiency.

Direct Materials Cost

The expense associated with raw materials that are directly incorporated into a finished product.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate product or service costing.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, depreciation of equipment, and salaries of maintenance staff.