The Term 'Incremental Cost' Refers To

question 19

Multiple Choice

The term 'incremental cost' refers to:

• A) a cost that is directly traceable to a specific cost object.
• B) the difference in total costs between alternatives.
• C) a cost that continues to be incurred even though there is no activity.
• D) the operating profit forgone by selecting one choice instead of another.

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Definitions:

Accounts Payable

Money owed by a company to its creditors for goods and services that have been received but not yet paid for.

Prepaid Expenses

The payments the company has already made for services not yet received.

Compensation Policy

The level of compensation and benefits for each type of position in the business.

Obligations

Duties or responsibilities that an individual or organization is required to fulfill, often by law, social norms, or personal commitment.