Average Cycle Time Is Estimated By

question 46

Multiple Choice

Average cycle time is estimated by:

• A) production time ÷ value of goods produced
• B) total processing time ÷ total number of units produced
• C) total processing time ÷ number of good units produced
• D) number of good units produced ÷ total processing time

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Variable Costing

An accounting method that charges only variable production costs to units produced and treats fixed manufacturing overhead as a period expense.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.