In an Actual Cost System, It Is Difficult to Determine

question 153

Multiple Choice

In an actual cost system, it is difficult to determine the _____ per unit.

• A) direct labor cost
• B) overhead cost
• C) cost of direct material consumed
• D) All of these are correct.
• E) None of these are correct.

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Definitions:

Opportunity Cost

Cost associated with opportunities forgone when a firm’s resources are not put to their best alternative use.

Projected Net Present Value

An estimation of the present value of an investment's future net cash flows minus the initial investment cost.

Capital

Financial assets or the financial value of assets, such as cash or goods, used to generate income or wealth.

Internal Rate

A financial metric, often referred to as the internal rate of return (IRR), that calculates the profitability of potential investments.