Which of the Following Is Not Included in the Cost

question 16

Multiple Choice

Which of the following is not included in the cost of an internally generated intangible asset?

• A)costs of materials and services used or consumed in generating the intangible asset
• B)fees to register a legal right
• C)expenditure on training staff to operate the asset
• D)amortisation of patents and licences that are used to generate the intangible asset

Discuss the treatment of fixed manufacturing overhead costs under variable and absorption costing.

Understand the relevance of traceable fixed expenses and common fixed costs in segmented reporting.

Compare product and period costs under variable and absorption costing.

Interpret the impact of product line elimination on overall company profit.

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Definitions:

Fed Funds Rate

The interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.

Equilibrium Levels

The point at which market supply and demand balance each other, and as a result, prices become stable.

Real Interest Rates

Measures the borrowing cost of money after adjusting for inflation, providing a clearer view of the true cost of borrowing or the true yield on an investment.

Nominal Rate of Interest

The rate of interest before adjustments for inflation.