Which of the Following Is True of a Direct Materials

question 20

Multiple Choice

Which of the following is true of a direct materials cost?

• A) A direct materials cost is included in factory overhead.
• B) It is sometimes called factory burden.
• C) It is not a significant portion of the total product cost.
• D) It is the cost of any material that is an integral part of the finished product.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities. It represents ownership equity spread among shareholders.

Shares Outstanding

The total number of shares of a corporation that have been issued and are held by shareholders.

Total Dividends

The cumulative amount of dividends that a company pays out to its shareholders over a specific period.

Firm Value

The total worth of a company, determined by its assets, earnings potential, and market value of its shares, reflecting both tangible and intangible factors.