George, a managerial accountant in a jute manufacturing company, is asked to calculate the total amount of money the company spends on the wages of its workers and on the payments it makes to its suppliers for raw materials. By finding out the company's total actual expenses, the management can come to a decision on whether or not the company can increase its workers' wages by at least ten percent. In this scenario, George is asked to calculate the company's _____.
A) incremental costs
B) implicit costs
C) out-of-pocket costs
D) opportunity costs

Question

Quizplus · Accepted Answer

Out-of-pocket costs refer to actual cash expenditures that a company incurs, such as wages and payments to suppliers, which is what George is calculating.

George, a Managerial Accountant in a Jute Manufacturing Company, Is