The Three Factors That Affect the Time Value of Money

question 115

True/False

The three factors that affect the time value of money are principal, number of periods, and interest rate.

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Definitions:

Unit Product Cost

The total expense involved in manufacturing a single product unit, encompassing direct materials, direct labor, and apportioned overhead costs.

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable overhead) in product costs and expenses fixed overhead as a period cost.

Unit Product Cost

The total cost, including materials, labor, and overhead expenses, divided by the total number of units produced.

Absorption Costing

Absorption costing is a method in accounting that includes all manufacturing costs - both direct and indirect - in the cost of a product.