A/An _____ Is Defined as the Cost of the Next

question 53

Multiple Choice

A/An _____ is defined as the cost of the next best alternative.

• A)operating cost
• B)purchase price
• C)net present value
• D)usage cost
• E)opportunity cost

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Definitions:

Materials

Refers to the tangible components used in the production of goods and services, often categorized as direct or indirect materials depending on their direct allocation to a cost object.

Mark-Up Percentage

An added percentage to the buying price of products intended to cover both operational costs and earnings.

Total Variable Cost

The total of all costs that vary directly with the level of output, such as materials and labor costs that increase as more units are produced.

Cost-Plus Pricing

An approach to pricing in which the final selling price is set by adding a predetermined markup to the cost of a single unit of the product.