In Projecting Operating Expenses for the Second and Third Year

question 44

Multiple Choice

In projecting operating expenses for the second and third year costs like ________ are likely to remain stable unless new equipment or additional space is purchased. 

• A) cost of goods sold
• B) gross profit
• C) advertising
• D) insurance

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Definitions:

Marginal Cost

The change in total cost that arises from producing one additional unit of a product or service.

Marginal Revenue

The increase in income resulting from the sale of one extra product or service unit.

Increasing Profits

Refers to a scenario where a business experiences a rise in net earnings over a period, typically as a result of higher revenue, cost efficiencies, or favorable market conditions.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.