Describe How Process Costing for Services Differs from Process Costing

question 73

Essay

Describe how process costing for services differs from process costing for manufactured goods.

---

Definitions:

Economic Profit

The excess of total revenue over total costs, including both explicit and opportunity costs.

Price

The sum of money needed to buy a product or service.

Short-Run Supply Curve

A graphical representation showing the quantity of a good that producers are willing and able to sell at different prices over a short period.

Marginal Cost Curve

A graph showing the change in the cost of producing one more unit of a good as production levels change.