Fixed Costs Buyers Face If They Change Suppliers Are Called

question 43

Multiple Choice

Fixed costs buyers face if they change suppliers are called

• A) Changing costs.
• B) Switching costs.
• C) Supplier costs.
• D) Exchange costs.
• E) Sunk costs.

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Definitions:

Variable Costing

A cost accounting method that only allocates variable production costs to products, while fixed costs are treated as period expenses.

Net Income

The net earnings of a business once all costs, taxes, and expenses have been deducted from its total income.

Inventory

The total amount of goods a company holds in stock, including raw materials, work-in-progress, and finished goods.

Variable Costing

An accounting method that only assigns variable costs to inventory, considering fixed costs as period expenses.