When Economists Refer to a Production Cost That Has Already

question 1

Multiple Choice

When economists refer to a production cost that has already been committed and cannot be recovered,what term do they use

• A)implicit cost
• B)explicit cost
• C)variable cost
• D)sunk cost

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Definitions:

Net Pay

Gross earnings less payroll deductions.

Warranty Cost

Expenses incurred by a company to repair, replace, or refund products that are found to be defective after purchase.

Expense Recognition Principle

An accounting concept that expenses should be recognized in the period when the revenues generated by such expenses are recognized.

Payroll Tax Expense

Payroll tax expense refers to the taxes that employers are required to pay on behalf of their employees, such as Social Security and Medicare taxes in the United States.