Which One of the Following Is an Example of an Externality

question 21

Multiple Choice

Which one of the following is an example of an externality cost?

• A)the cost of labor
• B)the cost of materials to produce a product
• C)the cost of operating a manufacturing plant
• D)the cost of restoring contaminated and barren land

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Definitions:

Cash Conversion Cycle

An indicator that calculates how long a business requires to turn its inventory and asset investments into cash earnings from sales activities.

Departmental Contributions

The financial or resource contributions made by individual departments towards the achievement of the overall organizational goals.

Direct Expense

Direct expense refers to costs directly incurred in the manufacturing of a product or in providing a service, distinguishable by its direct association with specific business activities.

Indirect Expenses

Costs that are not directly attributable to the production of goods or services, such as administrative and marketing expenses.