The Law of Increasing Cost Is Based Upon Which of the Following

question 108

Multiple Choice

The Law of Increasing Cost is based upon which of the following?

• A)If units of a resource are added to a fixed proportion of other resources,eventually marginal output will decline.
• B)Economies of scale eventually outweigh diseconomies of scale.
• C)Resources become more suitable for use in the production process as the output of one good expands.
• D)All of the choices are true.

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Definitions:

Percent of Sales Method

A financial forecasting model that estimates certain balance sheet and income statement accounts as a percentage of projected sales.

Bad Debt Expense

The amount of receivables that a company estimates it will not collect.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Allowance Method

The allowance method is an accounting technique used to estimate and account for potential credit losses on accounts receivable, recognizing them as an expense before they occur.