Which of the Following Examples Does Not Illustrate the Principle

question 257

Multiple Choice

Which of the following examples does not illustrate the principle represented by the adage, "There is no such thing as a free lunch"?

• A) Melissa needs to pay her rent and her electric bill.
• B) Kevin must choose between buying a new flat screen television and buying his textbooks for this semester.
• C) Robert must decide between studying for his psychology exam and working at his part-time joc.
• D) Lisa can spend her money on a new smart phone or on a weekend trip.

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Definitions:

Variable Costing

A method of costing that includes only variable production costs (costs that vary with production volume) in the cost of goods sold and excludes fixed manufacturing overhead.

Net Operating Income

Earnings derived from a company's regular business activities, excluding deductions of interest and taxes.

Net Operating Income

Income from a company's operations, excluding taxes and interest, reflecting the profitability of the core business activities.

Unit Product Cost

The total cost associated with producing one unit of a product, including direct materials, labor, and allocated overhead.