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:

Profit-Maximizing

The process of adjusting production and pricing strategies to achieve the highest possible profit from business operations.

Marginal Revenue

The additional income produced from selling one more unit of a good or service.

Economic Profit

The difference between the total revenue generated by a business and its total costs, including both explicit and implicit costs.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand dynamics.