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

---

Definitions:

Financial Break-even

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, representing wear and tear, decay, or decline in value.

Contribution Margin

The portion of sales revenue that exceeds variable costs, contributing towards covering fixed costs and generating profit.

Variable Cost

Costs that change in proportion with the level of output or activity, such as raw materials and labor costs.