Indicate Whether the Following Items Would Be Reported as an Operating

question 20

Essay

Indicate whether the following items would be reported as an operating cost or an unusual item in Kelly Corporation's income statement.If it is not unusual, state how the item should be recorded in the income statement.
A) Loss attributable to labour strike.B) Loss on sale of mining equipment.
C) Gain on the disposition of the company's retail operations.D) Loss from sale of FVTOCI securities.
E) Expropriation of property by a foreign government.

• A) Loss attributable to labour strike.B) Loss on sale of mining equipment.
• C) Gain on the disposition of the company's retail operations.D) Loss from sale of FVTOCI securities.
• E) Expropriation of property by a foreign government.

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Definitions:

Variable Costing Income Statement

A financial statement that only includes variable production costs in the cost of goods sold, with fixed production costs treated as period expenses.

Absorption Costing

In this accounting technique, all manufacturing-related costs - direct materials, direct labor, variable, and fixed overheads - are factored into the product's cost.

Variable Production Costs

Costs that change in proportion to the level of production activity, such as raw materials and direct labor.

Period Cost

Expenses that are not tied directly to product production and are expensed in the period they are incurred.