Traditional Product Costing Systems Result in Inaccurate Product Costs When

question 18

Multiple Choice

Traditional product costing systems result in inaccurate product costs when:

• A) direct labour increases.
• B) the proportion of direct labour and raw material increases.
• C) product diversity increases.
• D) the proportion of direct labour and raw material increases AND product diversity increases.

Utilize methods to estimate and analyze variable and fixed components of mixed costs.

Understand the significance of the contribution margin and its calculation.

Understand the concept of fixed, variable, and mixed costs.

Apply the high-low method to determine fixed and variable components of costs.

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Definitions:

Hypermarkets

Large retail spaces combining a supermarket and a department store, offering a wide range of products under one roof.

Supercenters

Large retail establishments that combine a supermarket and a department store, offering a wide variety of goods and services.

Outlet Stores

Retail stores that sell products directly from manufacturers, usually at discounted prices.

Bargain Shopping

The act of seeking out products that are available at a lower price or on sale, aiming to save money on purchases.