When comparing accounting vs. economic costs, the major disadvantage of using accounting costs is that they will always predict lower costs per surgery on those days when the number of surgeries is higher than expected. In reality this is not true, however, as every deviation from the planned level of operation raises costs, such as payment of overtime, extra expenses when hiring temps, cost of rush ordering of exhausted supplies, etc.

Question

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Accounting costs typically do not account for the additional expenses incurred from deviations in planned operations, such as overtime and rush orders, which are considered in economic costs.

When Comparing Accounting Vs