Which of the Following Is Used to Determine a Product's

question 46

Multiple Choice

Which of the following is used to determine a product's life-cycle cost?

• A)disposal cost
• B)direct materials cost
• C)direct labor cost
• D)cost of satisfaction
• E)distribution cost

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's earnings before interest and taxes (EBIT) to a percentage change in sales, indicating the impact of fixed costs on profits.

High-low Method

The high-low method is an accounting technique used to estimate the variable and fixed costs of a business based on the highest and lowest levels of activity.