Pets 'N Pals Is Attempting to Determine the Cost of Operating

question 7

Multiple Choice

Pets 'n Pals is attempting to determine the cost of operating a particular store.Which of the following costs would be classified as an indirect cost?

• A) Fees paid to external accountant for corporate audit
• B) Cost of operating company-owned vehicles by the store
• C) Salary of store manager
• D) Cost of aquariums used to display exotic fish

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Definitions:

Utility Function

An analytic depiction of the way individuals order assortments of items based on their contentment or value received.

Equivalent Variation

A monetary measure of the change in utility or satisfaction that a consumer experiences due to a change in prices, holding utility constant.

Consumption

The use of goods and services by households or individuals for personal satisfaction or need.

Utility Function

A mathematical representation of how a set of goods or services provide a level of satisfaction or utility to an individual or entity.