Which of the Following Is NOT Included in the Cost

question 47

Multiple Choice

Which of the following is NOT included in the cost of a building that was constructed by the company?

• A)interest on money borrowed to finance the construction
• B)cost of removing an unwanted building from the property
• C)architectural fees
• D)payments for material,labor and overhead for construction of new building

Appreciate the importance of budget reports for managerial feedback and control.

Understand the significance of comparing actual to planned results and the utility of budget reports.

Grasp the concept of flexible budgeting and its adaptability to various levels of activity.

Understand the concept and calculation of the fiscal multiplier and the marginal propensity to consume (MPC).

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Definitions:

Marginal Cost

The financial outlay involved in the manufacture of one more unit of a product or service.

Monopoly Power

The capacity of a firm to control market prices and exclude competition, often by being the sole provider of a product or service.

Barriers to Entry

Barriers that make it difficult for new entrants to join a market or business sector.

Average Total Cost Curve

Depicts the per-unit total cost of production (fixed cost plus variable cost) divided by the quantity of output produced.