If a Firm Decides to Produce a Product That It

question 30

Multiple Choice

If a firm decides to produce a product that it once purchased from a firm upstream it has made a

• A)horizontal decision.
• B)make or buy decision.
• C)downstream decision.
• D)sell or service decision.

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Definitions:

Overapplied Amount

A situation in cost accounting where the allocated factory overhead costs exceed the actual overhead costs incurred.

Factory Overhead

Indirect costs related to manufacturing, including utilities, maintenance, and factory equipment depreciation.

Machine Hours

A measure of production time, calculated as the total number of hours that machines are operated during a specific period.

Applied Amount

The portion of an allocated or assigned cost to a particular department, project, or product.