Company's Controller Is Calculating the Current Month's Cost of Goods

question 51

Multiple Choice

Company's controller is calculating the current month's cost of goods manufactured.Which of the following should be considered as part of the calculation?

• A)Direct labor and indirect costs.
• B)Indirect labor and commission expenses.
• C)Manufacturing overhead and the corporate vice president's salary.
• D)Cost of materials used and finished goods inventory.

---

Definitions:

Pre-Tax Cost

The expense or cost incurred by an entity before taxes have been deducted.

Unlevered Cost

The cost of an investment or project assuming no debt is used to finance the investment; reflecting its cost of capital without leverage.

Unlevered Cost

The cost of capital that a company faces before taking into account the effects of debt financing.

Pre-Tax Cost

The expense or cost that a company incurs before adjusting for taxes.