The Law of Increasing Additional Cost Exists Because

question 4

Multiple Choice

The law of increasing additional cost exists because

• A) resources are not perfectly adaptable to both production processes.
• B) the demand for the product increases.
• C) the cost of resources of the products increase.
• D) the cost of resources of the products decrease.

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Definitions:

Deposit Method

An accounting method used for recognizing revenue and expenses related to long-term contracts where the earnings process is incomplete.

Revenue Recognition

The accounting principle that outlines the specific conditions under which revenue is recognized or recorded.

Initial Direct Costs

Upfront expenditures that are directly associated with securing a contract or lease, such as legal and brokerage fees.

Service Costs

The expenses recognized in the period in which employees render services to obtain future benefits under a defined benefit plan.