In Calculating Accounting Profit, Accountants Typically Don't Include

question 483

Multiple Choice

In calculating accounting profit, accountants typically don't include

• A)long-run costs.
• B)sunk costs.
• C)explicit costs of production.
• D)opportunity costs that do not involve an outflow of money.

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Definitions:

Fixed Production Costs

Manufacturing costs that remain constant regardless of the level of production, such as rent and salaries of permanent staff.

Per Unit

A term that describes costs or revenues on a single unit basis.

Variable Costs

Expenses that directly fluctuate in proportion to the production or service activity level.

Activity

Any action or operation within a business or process.