The Costs of Services Charged to a Profit Center on the Basis

question 49

Multiple Choice

The costs of services charged to a profit center on the basis of its use of those services are called:

• A) operating expenses
• B) noncontrollable charges
• C) service department charges
• D) activity charges

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Definitions:

MC = P

A formula indicating that in perfect competition, the price (P) is equal to the marginal cost (MC) of producing an additional unit.

Economic Profits

The variance between complete earnings and aggregate expenses, taking into account both overt and covert costs.

Downward-Sloping Demand

A market scenario where the quantity demanded by consumers decreases as the price of the good increases, illustrating the inverse relationship between price and demand.

Downward Sloping

Describes a line or curve on a graph that represents a decrease or decline in value as one moves from left to right.