Which of the Following Descriptions Best Explains the Difference Between

question 41

Multiple Choice

Which of the following descriptions best explains the difference between a billing system and a costing system for a service firm?

• A) A costing system accumulates the amounts that the service costs the firm to provide.
• B) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour.
• C) A billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.
• D) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour AND a billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.

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Definitions:

Income And Substitution Effects

The changes in quantity demanded of a good due to a change in income (income effect) or a change in price leading consumers to substitute one good for another (substitution effect).

Demand Curve

A visual chart that illustrates how the quantity of a product demanded by customers varies according to its price.

Consumer Equilibrium

The point at which the satisfaction obtained from a good or service equals the price paid for it, maximizing utility.

Substitution Effect

The change in consumption resulting from a change in relative prices, leading consumers to substitute away from higher-priced goods towards lower-priced ones.