The Value of Money Changes Over Time Because

question 36

Multiple Choice

The value of money changes over time because:

• A) there is an opportunity cost of waiting for money in the future.
• B) people prefer to save money rather than spend it immediately.
• C) the government collects taxes.
• D) none of the reasons listed here cause the value of money to change over time.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in the cost of a product.

Unit Product Cost

The total cost assigned to a single unit of product, including direct materials, direct labor, and allocated overhead.

Absorption Costing

An approach in financial accounting that wraps all expenses incurred in manufacturing including direct materials, direct labor, and all overhead (variable and fixed), into the product's cost.

Net Operating Income

The total revenue of a business minus its operating expenses, excluding taxes and interest.