Which of the Following Statements Is True? Indicators of Problems

question 38

Multiple Choice

Which of the following statements is true? Indicators of problems with product cost systems are:
i.non-manufacturing costs that are product related become insignificant
ii.the proportion of manufacturing overhead not driven by production volume increases
iii.there is an increase in product diversity

• A) i
• B) ii
• C) iii
• D) ii and iii

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Definitions:

Frosting

In a culinary context, a sweet and fluffy coating or filling, usually made from sugar, butter, and flavorings, used to decorate or fill cakes and pastries. If referring to a financial term, there is no widely recognized definition fitting "frosting."

Prime Costs

The direct costs directly attributable to the production of goods, including direct materials and direct labor.

Conversion Costs

The total expenses of direct labor plus manufacturing overheads spent in transforming raw materials into completed goods.

Depreciation Expense

Depreciation expense represents the allocated cost of an asset's reduction in value over time, reflecting the wear and tear or obsolescence of long-term assets used in business operations.