The __________ Technique May Be Applicable Where a Firm's Parts

question 22

Short Answer

The __________ technique may be applicable where a firm's parts and subassemblies are common to a variety of its products.

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Definitions:

Incremental Cost

The additional cost that a company incurs when producing one more unit of a product.

Incremental Costs

Costs that change as a result of a decision to increase or decrease the level of an activity or operation.

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered by future actions, and therefore should not influence current or future business decisions.

Out-of-pocket Cost

Expenses that are paid out directly and result in a financial outlay.