Implicit Costs Are

question 27

Multiple Choice

Implicit costs are:

• A) the opportunity costs of using resources owned by the entrepreneur in his/her own business.
• B) payments the business owner must make on borrowed funds.
• C) costs which vary as the level of output varies.
• D) those payments the business owner makes in cash.
• E) the payments the business owner makes for public relations, such as donations to charity.

Understand the principles of activity-based costing (ABC) and its application.

Grasp the basics of activity-based management (ABM) and its importance.

Recognize how products and services consume resources differently according to their complexity and batch size.

Learn about cost pools, drivers, and their roles in the cost allocation process.

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Definitions:

Lignite Coal

A soft brownish coal showing traces of plant structure, the lowest grade of coal due to its relatively low heat content.

Bituminous Coal

A type of coal noted for its relatively high energy and carbon content, used primarily for electricity generation and steel production.

Superinsulation

An approach to building design and construction that greatly increases thermal resistance, significantly reducing heating and cooling demands.

Active Solar Heating

A system that uses solar energy to heat a fluid (either liquid or air), transferring this heat to the interior of a building or to a storage tank for later use.