Which of the Following Is NOT an Example of a Difference

question 142

Multiple Choice

Which of the following is NOT an example of a difference between the income statement of a service organization and the income statement of a manufacturing organization?

• A)A service company will never have work in process.
• B)The service company will not have a finished goods inventory.
• C)Fulfillment costs may be added to cost of goods sold of a service company.
• D)Research and development expenses are not usually a major component of a service organization.

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, multiplied by the standard cost per unit.

Data Collected

Information gathered for analysis or used to make decisions, often through observations, experiments, or measurements.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and direct labor costs.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, providing stability in a budget.