The Use of Brand Names Is Especially Important for Services

question 71

Multiple Choice

The use of brand names is especially important for services because of which unique characteristic of services?

• A) inventory costs
• B) inseparability
• C) inconsistency
• D) invisibility
• E) intangibility

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Definitions:

Net Operating Income

Profit generated from a company’s core business operations, excluding deductions of interest and taxes.

Absorption Costing

This accounting practice involves the comprehensive addition of manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—to the price of a product.

Fixed Manufacturing Overhead

Fixed manufacturing overhead consists of indirect production expenses that remain constant regardless of the volume of products manufactured, like equipment depreciation.

Deferred

Refers to actions, expenses, or incomes that are postponed or delayed to a future period instead of being recognized immediately.