A Cost Function Is a ________

question 87

Multiple Choice

A cost function is a ________.

• A) process of calculating present value of projected cash flows
• B) process of allocating costs to cost centers or cost objects
• C) mathematical description of how a cost changes with changes in the level of an activity relating to that cost
• D) is a very thorough and detailed way to identifying a cost object when there is a physical relationship between inputs and outputs

---

Definitions:

Inventory Cost

The total cost incurred to procure, produce, and store inventory, including purchase price, production, and handling costs.

Gross Profit

the difference between revenue and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.

Cost Of Goods Sold

The immediate expenses directly related to creating a company's sold products, covering both labor and materials costs.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, after all sales and purchases have been accounted for.