When Costs Can Be Traced to a Particular Cost Object

question 41

Multiple Choice

When costs can be traced to a particular cost object in an economically feasible way, the cost is a:

• A) direct cost
• B) indirect cost
• C) allocated cost
• D) budgeted cost

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a good or service, a critical concept in economic decision-making and pricing strategies.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not reduce its availability to others.

Marginal Costs

The increase in total cost that arises from producing one additional unit of a good or service.

Marginal Benefits

The additional satisfaction or utility a consumer receives from consuming one more unit of a good or service.