In a Manufacturing Company, the Cost of Direct Labour Treated

question 115

Multiple Choice

In a manufacturing company, the cost of direct labour treated as an expense when

• A)products are sold.
• B)products are transferred into work in process inventory.
• C)wages are paid to the employees.
• D)at month end with accruals for wages.

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Definitions:

Random Fluctuations

Unpredictable changes or variations that can affect statistical data and outcomes.

Cash Flows

The generation and use of cash by a business during a defined period of time, instrumental for assessing the company's liquidity, solvency, and financial flexibility.

Carrying Costs

Expenses associated with holding or storing inventory, including insurance, storage, and loss through obsolescence.

Adjustment Costs

These are expenses incurred by a firm when adjusting its production volume, workforce, or operations, often associated with changing output levels.