Which of the Following Statements Is True

question 248

Multiple Choice

Which of the following statements is true?

• A)An explicit cost is an actual cost; an implicit cost is a theoretical cost.
• B)Economic costs include both explicit costs and implicit costs.
• C)An explicit cost is more important, dollar for dollar, than an implicit cost.
• D)Explicit costs are accounting costs, not economic costs; implicit costs are economic costs, not accounting costs.

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Definitions:

Batch

A set of goods or materials processed or produced at the same time, often used in the context of batch processing.

Split-Off Point

That point in the manufacturing process where some or all of the joint products can be recognized as individual products.

Sales Value

The total revenue attained from goods or services sold, calculated by multiplying the selling price by the number of units sold.

Absorption Costing

A costing method where all manufacturing costs, both fixed and variable, are allocated to products, thus "absorbing" them into the cost of goods sold.