Service-Sector Companies ________

question 83

Multiple Choice

Service-sector companies ________.

• A) do not produce tangible products but cost accounting is still utilized in service firms.
• B) do not manufacture a product and therefore do not apply or adapt cost accounting to their operations.
• C) purchase and then sell tangible products by changing their basic form and therefore need cost accounting.
• D) purchase merchandise then sell it without changing its basic form and therefor do not need cost accounting systems.

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Definitions:

Total Cost

The sum of all expenses incurred by a firm in producing goods or services, including both fixed and variable costs.

Maximizing Profits

The process of adjusting production and sales strategies to achieve the highest possible return from operations.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Price

The amount of money expected, required, or given in payment for something.