Which of the Following Exists When One Person's Activity Results

question 2

Multiple Choice

Which of the following exists when one person's activity results in direct costs or benefits to someone who is not part of the marketplace decision to undertake the activity?

• A)Externality
• B)Specificity rule
• C)Property rights
• D)Marginal cost

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Definitions:

Unit Product Cost

The cost associated with producing a single unit of output, including direct materials, direct labor, and allocated overhead costs.

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or purchased items are the first to be expensed.

Absorption Costing

A costing method where all manufacturing costs including both direct costs like labor and materials and indirect costs like overhead are allocated to the product.

Variable Costing

An accounting method that only considers variable costs in the calculation of product or service costs, excluding fixed costs.