The Costs That Are Incurred for the Benefit of Multiple

question 55

Short Answer

The costs that are incurred for the benefit of multiple cost objects are _____________ (direct/indirect)costs.

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the cushion a business has before it incurs a loss.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in dollar sales.

Net Operating Income

The income derived from a firm's core business operations, not including taxes and interest expenses.

Contribution Margin Ratio

A ratio that measures the percentage of sales revenue remaining after deducting variable costs, indicating the portion of sales available to cover fixed costs and generate profit.