Which Term Refers to the Costs Associated with Changing from One

question 42

Multiple Choice

Which term refers to the costs associated with changing from one choice, such as a brand, retailer, or service provider, to another?

• A) switching costs
• B) transfer costs
• C) conversion costs
• D) external costs

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Definitions:

Allocated Fixed Costs

Costs that remain constant for a specific period regardless of the level of production or business activity, which are distributed across different departments or products.

Variable Departmental Costs

Costs that vary directly with the volume of output or level of activity within a specific department.

Direct Fixed Costs

Costs that are directly linked to a specific department or cost center and do not vary with the level of production or sales.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity by calculating the present value of expected future cash flows using a discount rate.