BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fuel payment or electricity bills
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the cost made for certain product
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costs that are non traceable
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the cost that combines profit and loss
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Detailed explanation-1: -The actual expenses incurred by the entrepreneur in employing inputs are called outlay costs. These include costs on payment of wages, rent, electricity or fuel charges, raw materials, etc. We have to treat them are general expenses for the business.
Detailed explanation-2: -An outlay cost is any expenditure made to support an activity. For example, the outlay cost for a research project may include wages, lab supplies and test services. Or, the outlay costs for a production run includes direct materials, indirect supplies, and direct labor.
Detailed explanation-3: -Rent and Utilities The costs associated with maintaining the office or manufacturing space companies must have in order to perform their business is an example of overhead. This includes rent as well as utilities such as water, gas, electricity, internet, and phone service.
Detailed explanation-4: -The cost of electricity is an indirect cost since it can’t be tied back to the product or the specific machine. However, the cost of electricity is a variable cost since electricity usage increases with the number of products that are produced or manufactured.
Detailed explanation-5: -Costs are broadly classified into four types: fixed cost, variable cost, direct cost, and indirect cost.