The Additional Cost Resulting from a Small Increase in Some

question 37

Multiple Choice

The additional cost resulting from a small increase in some activity is called the

• A) opportunity cost.
• B) marginal benefit.
• C) marginal cost.
• D) diminishing returns of the activity.

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Definitions:

Automobile Manufacturing

The industry involved in the design, development, production, marketing, and selling of motor vehicles.

Sensitivity Analysis

A procedure for examining the repercussions that different magnitudes of an independent variable have on a dependent variable, within the context of predetermined assumptions.

Cash Break-Even

The amount of revenue necessary to cover all cash operating expenses, ignoring non-cash costs.

Fixed Costs

Expenses that do not change with changes in the volume of production or sales, such as rent, salaries, and insurance.