Which of the Following Should Not Be Included in Inventory

question 115

Multiple Choice

Which of the following should not be included in inventory cost for a car dealership?

• A)The costs of transporting the cars from the factory to the dealership
• B)Cost of new car preparation for customers
• C)The salary and commission of the salesman who sells the vehicle
• D)The cost of adding a CD player to the vehicles before the vehicle is offered for sale

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Definitions:

Total Expense

The sum of all costs and expenses incurred by a business during a specific period.

Expected Costs

Anticipated costs based on future events, often derived from historical data and forecasting.

Activity Levels

The volume of production or the level of sales activity within a company, which can affect various costs and pricing strategies.

High-low Method

An accounting technique used to estimate variable and fixed costs by analyzing the lowest and highest levels of activity and their associated costs.