Which One of the Following Types of Costs Is Excluded

question 79

Multiple Choice

Which one of the following types of costs is excluded from the cost of inventory that is routinely manufactured?

• A)interest
• B)raw materials
• C)normal spoilage
• D)insurance

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Definitions:

Return Required

The minimum expected rate of return on an investment necessary for an investor to consider it worthwhile.

Interest-Bearing Note

A debt instrument that pays interest to the holder, typically issued at face value and redeemed at maturity for the same amount plus accrued interest.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes.

Income Statement

A report showing the earnings, expenses, and net income of a business during a particular period, reflecting its financial performance.