Examples of credit-related marginal costs are all of the following EXCEPT:
A)Advertising costs associated with promoting the company's credit policy.
B)Opportunity costs associated with supporting a higher level of receivables.
C)Labor costs associated with checking new credit accounts and collecting receivables.
D)Bad-debt expenses.

Question

Quizplus · Accepted Answer

Advertising costs associated with promoting the company's credit policy are not directly related to the cost of extending credit or managing credit risks, but rather are part of the company's overall marketing expenses. The other options listed, including opportunity costs, labor costs, and bad-debt expenses, are all credit-related marginal costs that companies must consider when making decisions about their credit policies.

Examples of Credit-Related Marginal Costs Are All of the Following