The Difference in Cost Between Two Alternatives,such as to Make

question 43

Multiple Choice

The difference in cost between two alternatives,such as to make a component part of a final product versus buying the part from an outside supplier is called:

• A)Variable cost.
• B)Differential cost.
• C)Product cost.
• D)Indirect cost.

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Definitions:

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting accumulated depreciation from the original cost.

Partial Equity Method

An accounting approach used for long-term investments, where only a portion of the investee's net income or loss is reflected in the investor's financial statements.

Excess Fair Value

The amount by which the fair value of an asset exceeds the cost of acquisition or the carrying amount in the company's financial statements.

Investment Account

A financial account held at a financial institution that holds securities, shares, and other investment assets for the investor.