Firm-Specific Risk Is Also Called ________ and ________

question 32

Multiple Choice

Firm-specific risk is also called ________ and ________.

• A) systematic risk; diversifiable risk
• B) systematic risk; nondiversifiable risk
• C) unique risk; nondiversifiable risk
• D) unique risk; diversifiable risk

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Definitions:

Variable Manufacturing Overhead

Costs that fluctuate with the level of production output, such as raw materials and direct labor.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to products.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct material and direct labor costs, such as utilities and rent for the manufacturing space.

Machine-Hours

A measure of the amount of time machines are used in the production process, used as a basis for allocating manufacturing overhead costs.