Explain the Difference Between Short-Term and Long-Term Investments and Give

question 75

Essay

Explain the difference between short-term and long-term investments and give examples of each.

---

Definitions:

Special Order

An order for products or services that is outside the company's normal scope of work, often requiring a custom quotation or pricing.

Direct Labor

The workforce costs directly involved in producing a product or delivering a service, excluding indirect labor expenses.

Differential Cost

The variance in overall expenses incurred when choosing one option instead of another.

Relevant Costs

Costs that will be affected by a decision and hence should be considered in the decision-making process.