Actual Investment Spending Does Not Include

question 38

Multiple Choice

Actual investment spending does not include

• A)spending on consumer durable goods.
• B)spending on new capital equipment.
• C)spending on new houses.
• D)changes in inventories.

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Definitions:

Cost Driver

A factor that influences or contributes to the expense of certain business operations.

Direct Costs

Costs that can be directly attributed to the production of a specific good or service, such as raw materials and direct labor.

Allocation Base

A measure or statistic used to distribute indirect costs to different cost objects, such as departments or products.

Overhead Costs

Expenses related to the day-to-day running of a business that cannot be directly attributed to creating a product or service, such as rent, utilities, and insurance.