A "What If" Simulation Using a Computer Helps To

question 52

Multiple Choice

A "what if" simulation using a computer helps to:

• A) reduce the risk associated with a particular investment.
• B) determine the effects of changes in certain variables.
• C) increase the accuracy of the inputs.
• D) none of these answer options are true.

Understand the concept of basing predetermined overhead rates on activity at capacity versus estimated activity for the year.

Understand the classification of costs as direct or indirect and how it can change based on the cost object.

Identify the components of prime and product costs including direct materials, direct labor, and manufacturing overhead.

Distinguish between period and product costs and understand their impact on financial reporting.

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Definitions:

National Output

The total value of all goods and services produced by a country's economy over a specific time period, often used to measure economic performance.

Expenditure Approach

A method of calculating GDP that sums up all expenditures in the economy, including consumption, investment, government spending, and net exports.

Government Spending

Expenditure by the government on goods and services, including public services and infrastructure projects.

Multinational Companies

Corporations that operate and have assets in more than one country, engaging in global business activities.