Marginal Costs Are Defined as

question 306

Multiple Choice

Marginal costs are defined as

• A) the change in total costs due to a one-unit change in production.
• B) costs that are viewed as marginal; of little or small importance.
• C) costs that represent a change, but one that cannot be measured correctly.
• D) the change in the decisions that are made by households and firms.

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Definitions:

Straight-line Method

A method of calculating depreciation and amortization by evenly distributing the cost of an asset over its useful life.

Salvage Value

The projected value at which an asset can be sold after its period of usefulness, utilized in the computation of depreciation costs.

Depreciated

The reduction in value of an asset over time due to wear and tear, age, or obsolescence, commonly used in accounting to allocate the cost of an asset over its useful life.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.