Which of the Following Is Not a Product Cost Under

question 15

Multiple Choice

Which of the following is not a product cost under full-absorption costing?

• A) Direct materials used in the current period.
• B) Rent for the warehouse used to store direct materials.
• C) Salaries paid to the top management in the company.
• D) Vacation pay accrued for the production workers.

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Definitions:

Gross Investment

The total expenditure on new capital assets plus the replacement of depreciated assets within an economy in a specific time period.

Net Domestic Product

The aggregate worth of every product and service generated inside a nation over a particular timeframe, deducting depreciation.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a specific time period, indicating economic health.

Depreciation

Depreciation is the accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.