The Fixed Ordering Cost Includes All Costs That Do Not

question 41

True/False

The fixed ordering cost includes all costs that do not vary with the size of the order but are incurred each time an order is placed.

---

Definitions:

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs.

Accounting Profits

The net income for a company after all expenses have been deducted from revenues, according to generally accepted accounting principles.

Implicit Costs

The opportunity costs of using resources owned by the company for its own operations, rather than earning income elsewhere.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.