COST-BENEFIT ANALYSIS Definition

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COST-BENEFIT ANALYSIS is the method of measuring the benefits anticipated from a decision by determining the cost of the decision, then deciding whether the benefit outweighs the cost of that decision.

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IDLE TIME is unproductive time caused by, e.g., machine breakdowns, shortages of material or inefficient scheduling. The cost of idle time is usually classified as an indirect rather than a direct cost.

FREIGHT OUT is the handling, packaging, and shipping costs of product; normally considered a selling cost.

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