A "No-Fee" Checking Account That Requires a Non-Interest-Earning Minimum Balance

question 4

True/False

A "no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.

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Definitions:

Manufacturing Overhead Cost

Indirect costs associated with manufacturing, not directly tied to the product, such as factory maintenance, utilities, and salary of the supervisory staff.

Contribution Margin

The gap between sales income and variable expenses, showing the extent to which income aids in addressing fixed costs and creating profit.

Selling Price

The amount of money charged for a product or service, or the sum a customer is willing to pay.

Fixed Manufacturing Cost

Expenses that do not change with the volume of production, such as rent, salaries, and insurance costs related to manufacturing facilities.