To Have Any Chance of Making a Profit, a Firm

question 54

True/False

To have any chance of making a profit, a firm must have a positive unit contribution margin.

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Definitions:

Product Costs

Costs that are directly associated with the creation of a product, including materials, labor, and overhead.

Direct Materials Cost

The expense associated with the raw materials directly used in the manufacture of a product.

Employee Wages

Compensation paid to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Total Product Cost

The sum of all costs directly or indirectly related to creating a product, including material, labor, and overhead expenses.