Which of the Following Is an Indirect Cost of Manufacturing

question 65

Multiple Choice

Which of the following is an indirect cost of manufacturing a table made of wood and glass for a firm that manufactures furniture?

• A) The cost of the wood in the table.
• B) The cost of the labor used to assemble the table.
• C) The cost of the glass in the table.
• D) The cost of rent on the factory where the table is manufactureD.
• Costs that cannot be traced to a specific cost object, or that are not worth the effort of tracing, are indirect costs, such as the cost of rent on the factory.

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Definitions:

Basic Accounting Equation

Represents the foundation of double-entry bookkeeping, stating that assets equal liabilities plus equity.

Assets

Resources owned by a business that are expected to provide future economic benefits.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Internal Transactions

financial events that affect the internal accounting of an organization without involving another entity.