When Fixed Costs Are Ignored Because They Are Irrelevant to a Business's

question 78

Multiple Choice

When fixed costs are ignored because they are irrelevant to a business's production decision,what are they called

• A)explicit costs
• B)implicit costs
• C)sunk costs
• D)opportunity costs

Analyze the effect of changes in sales mix, advertising budget, and pricing strategies on financial outcomes.

Understand the concept of operating leverage and its implications for business risk and profitability.

Apply contribution margin analysis to real-world business scenarios.

Evaluate the financial outcomes of introducing sales incentives and commission structures.

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Definitions:

Social Entrepreneur

Person who recognizes societal problems and uses business principles to develop innovative solutions.

Underprivileged Children

Young individuals lacking in advantages, opportunities, and resources commonly available to those in more affluent communities.

Not-For-Profit

An organization or entity that does not distribute its surplus funds to owners or shareholders but uses them to help achieve its goals, usually of a public or social nature.

Intrapreneur

An employee within a company who is given the freedom and financial support to create new products, services, systems, or businesses, acting as an entrepreneur within the organization.