An Object's External Costs Are the

question 27

Multiple Choice

An object's external costs are the

• A) price the consumer pays for a product less sales tax.
• B) price the consumer pays plus sales tax.
• C) costs borne by groups or individuals other than those using the product.
• D) actual costs incurred in producing a product.

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Definitions:

CVP Analysis

Cost-Volume-Profit Analysis, a financial tool used to determine how changes in cost and volume affect a company's operating income and net income.

Pre-Tax Net Income

The income earned by a business before the deduction of tax expenses.

Variable Costs

Expenses that change in proportion to the activity of a business, such as the cost of raw materials.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity.