Set-Up Costs Are the Cost of Labor to Do the Set-Up

question 95

True/False

Set-up costs are the cost of labor to do the set-up work for the new production run and the cost of lost production created by facility shut down during changeover.

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Definitions:

Cash Flow

A measurement of the net amount of cash and cash-equivalents being transferred into and out of a business.

Incremental Cost Approach

A decision-making process that focuses on the changes in total cost that would result from a decision to pursue one alternative over another.

Income Taxes

Taxes charged by the government on earnings generated by businesses and individuals within its jurisdiction.

Net Present Value

A calculation used to estimate the value of an investment, adjusting for its cash inflows and outflows over time and discounting them to the present day.