What Is the Term for Risk Associated with the Cost

question 2

Multiple Choice

What is the term for risk associated with the cost of the product?

• A) quantitative risk
• B) primary risk
• C) income risk
• D) financial risk

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Definitions:

Relevant Range

The range of activity or production level within which the assumptions of cost behavior hold true for a certain cost function.

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead to products.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, including rent, utilities, and administrative salaries.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.