Variable cost is not among the costs for decision making

We can list the essential factors that have a role in making a profit as follows:

• Price of the product (service) per unit
• Sales amount of the product (service)
• Variable cost of the product (service) per unit
• Total amount of fixed cost of the product (service)

Marginal cost is the additional cost incurred when making or producing (of a good or service) one additional unit. In other words, the change in total cost that arises from the quantity changes by one unit is called marginal cost.

Depending on the nature of the product/production process, management chooses among costing methods that differ in the extent of product cost definition. All manufacturing related factors are considered as part of product cost within the scope of the most extensive method, whereas the definition of the product cost includes only the cost of direct materials used, in the least extensive one. The costing methods by the scope of product
cost coverage are;
• Full Costing Method
• Normal Costing Method
• Variable Costing Method
• Direct Costing Method
• Throughput Costing Method

It is possible to classify administrative decisions into two categories as programmed (routine) and non-programmed (nonroutine) decisions.

Decisions which are taken in businesses can be classified into three categories: top-level management, mid-level management, low-level management.

Strategic Decisions, Managerial Decisions and Operational Decisions. 

It should be Peanut butter costing 

Programmed (Routine) Decisions: Programmed decisions are routinely repeated decisions. Such decisions are implemented in the same way as they have been once taken. Most of the daily decisions are considered as this type of decisions. Managers don’t need to allocate time for these types of decisions. Most of the decisions taken by lower-level managers and mid-level managers are scheduled decisions. Decisions related to staff affairs or decisions related to the purchase of raw materials and supplies are examples of this type of decisions.

In variable costing method, only the variable manufacturing costs are included in the product cost.

Classification According to the Level of Participation to Standard Setting Process: The standards are called either “authoritative standards” or “participative standards” depending on the level of inclusion of others in the standard-setting process.

In this method, expenditures for all manufacturing related factors are included in the product cost (Lazol, 2011: 131). Direct materials cost, direct labor cost, and manufacturing overhead costs are all included in the product cost with their total lump sum amount. In other words, product cost covers all direct costs and all indirect costs, irrespective of whether these factors are really used in production at full capacity or not.

Decision making is a flexible action. In decision making, the manager’s judgment, intuition, mood, and personal values can also be effective.

Net economic earning is the amount found out when the opportunity cost is subtracted from the expected profit.

Financial leverage, is the use of debt in financing the acquisition of new assets.

Classification According to Updating Frequency: The two contrast types of standards are “fixed standards” and “kaizen (continuous-improvement) standards”

ıt should be opportunity cost

500 - 300 = 200 TL

6.000 / 200 = 30 units

The overall purpose of budgeting is to plan different phases of business operations, coordinate the activities of different departments of the company and to ensure effective control over it. Managers prepare budgets with the objectives of;

1. allocating the company’s resources to each operation effectively,
2. communicating the objectives and goals to the subordinates,
3. motivating the superiors and subordinates towards the goals,
4. providing coordination among all divisions or employees,
5. comparing the actual and budgeted results, and take corrective actions, if necessary,
6. taking necessary precautions for the possible bottlenecks that the company may face in the following period.

As also understood from the information given, all of the statements in the options related to the objectives of budget are correct, so the correct answer is E.

Peanut butter costing is the name given to a costing system that broadly averages or spreads the cost of resources uniformly to cost objects

Step 7: Compute the total cost of the products

It shoudl be Process costing