A variable cost that has a definitive physical relationship to the activity measure is called a (n):
A) discretionary cost.
B) engineered cost.
C) managed cost.
D) programmed cost.
E) committed cost.

Question

Quizplus · Accepted Answer

Engineered costs are directly associated with a specific level of activity or volume of output, having a clear physical relationship to the activity measure. This means they can be precisely measured and directly linked to the level of production or service activity.

A Variable Cost That Has a Definitive Physical Relationship to the Activity