Out-Of-Pocket Costs Are Defined as the Benefit That Is Sacrificed

question 21

True/False

Out-of-pocket costs are defined as the benefit that is sacrificed when the choice of one action precludes taking an alternative course of action.

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Definitions:

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the finished product.

Direct Labor

The cost of labor that can directly be associated with the production of goods or services.

Overhead

Indirect costs related to production or operations, excluding direct labor and direct materials costs.

Incremental Income

The additional income that is generated by increasing sales or production by one additional unit.