The Two Kinds of Shortage Costs Are

question 29

Multiple Choice

The two kinds of shortage costs are:

• A) commitment costs and costs related to safety reserves.
• B) commitment costs and costs related to supply factors.
• C) commitment costs and order costs.
• D) order costs and costs related to safety reserves.
• E) order costs and costs related to supply factors.

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Definitions:

Competitors

Other businesses or individuals that offer similar products or services within the same market.

Variable Costs

Costs that change in proportion with the level of output or activity.

Fixed Costs

Costs that do not change with an increase or decrease in the amount of goods or services produced or sold.

Corporate Tax Rate

The percentage of a company's taxable income that it pays to federal, state, or local tax authorities.