Capital and Operating Expenditure Budgets Do Not Reflect Which Cost

question 49

Multiple Choice

Capital and operating expenditure budgets do not reflect which cost?

• A)insurance
• B)opportunity costs
• C)employee fringe benefits
• D)mortgage interest

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Definitions:

Operating Expense

Expenditures that a business incurs through its normal business operations.

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a business makes from its operations.

Selling Price

The amount for which a product or service is sold to the customer.

Unit Cost

The expenditure involved in generating, keeping, or obtaining one unit of a product or service.