An Organization's Ability to Profit Without Depleting Its Resources, Including

question 3

Multiple Choice

An organization's ability to profit without depleting its resources, including employees, natural resources, and the support of the surrounding community, is called

• A) adjustability.
• B) absorbability.
• C) substitutability.
• D) sustainability.
• E) credibility.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Fixed Costs

Costs that do not change with the level of goods or services produced in the short term.

Short Run

A period in economics where at least one factor of production is fixed, limiting the firm's ability to adjust to changes in market demand.

Variable Costing

An accounting method where variable costs are charged to cost units and fixed costs are treated as period costs.