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All Companies Have Hidden Costs That Often Reside in Overhead

question 18

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All companies have hidden costs that often reside in overhead.As a result,a supply professional needs an understanding of costs,cost systems,and overhead composition and allocation.


Definitions:

Profitable

Generating revenue that exceeds the costs and expenses involved in operating.

Long-Run Equilibrium

Long-run equilibrium occurs in a market when supply equals demand over time, allowing all participants to adjust fully to any changes.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced.

Price Takers

Price takers are participants in a market who must accept prevailing prices and cannot influence them due to their small market share.

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