The Cost That Is Avoided When a Company Eliminates a Single

question 26

Multiple Choice

The cost that is avoided when a company eliminates a single item of a product or service is a:

• A) Unit-level cost.
• B) Facility-level cost.
• C) Product-level cost.
• D) Batch-level cost.

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Definitions:

Payback Period

The duration required for an investment to produce a sum of income or cash that matches the investment's initial cost.

Useful Life

The estimated time period that an asset is expected to be usable for its intended purpose.

Simple Rate Of Return

A calculation used to evaluate the profitability of an investment, determined by dividing the annual incremental net operating income by the initial investment cost.

Salvage Value

The expected residual worth of an asset upon the conclusion of its effective lifespan.