Reference: Charlie's Chocolate Factory Manufactures Chocolate Bars and Ships Them Directly

question 39

Multiple Choice

Reference:
Charlie's Chocolate Factory manufactures chocolate bars and ships them directly to wholesalers and retailers across the country. The company has two product lines: milk chocolate bars and chocolate covered almonds. Classify the following company's expenses if the cost object is a single product line (either milk chocolate bars or chocolate covered almonds) .
-Advertising campaign for Charlie's Chocolate Factory, no specific products were mentioned in the campaign.

• A)Indirect product cost.
• B)Indirect period cost.
• C)Direct period cost.
• D)Direct product cost.

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Definitions:

Total Dollar Sales

The overall revenue generated from the sale of goods or services, expressed in terms of the total amount of money received.

Operating Leverage

A financial ratio that measures the proportion of fixed costs in a company's cost structure, indicating how a change in sales will affect its operating income.

Net Operating Income

The income produced through a firm's principal commercial activities, not including the subtractions for interest and taxes.

Sales Volume

The total quantity of goods or services sold by a company in a specific period.