What Would Be an Appropriate Explanation for Classifying Clerical and Administrative

question 22

Multiple Choice

What would be an appropriate explanation for classifying clerical and administrative salaries as an indirect cost in the Wood Panel Plant example?

• A) those costs are directly associated with this particular training program
• B) those costs would have been incurred even if the program were cancelled by management
• C) this classification decision was the authors' choice
• D) clerical and administrative staff support many different departments, not just HR

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Definitions:

Cournot Duopoly

An economic model that describes an industry structure in which two firms compete on output levels and choose quantities independently to maximize profit.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial health of a business.

Long-Run Equilibrium

A state in which all factors of production and outputs in an economy have fully adjusted and all changes are reflected in prices.

Marginal Revenue Curve

Illustrates how marginal revenue changes as the quantity of output sold changes.