Improvements Are

question 305

Multiple Choice

Improvements are

• A) revenue expenditures.
• B) debited to an appropriate asset account when they increase useful life.
• C) debited to accumulated depreciation when they do not increase useful life.
• D) debited to an appropriate asset account when they do not increase useful life.

---

Definitions:

Direct Materials

Raw materials that can be directly traced to the manufacturing process of a product and are a significant portion of the production cost.

Gross Profit

The subtract of cost of goods sold from net sales, indicating the efficiency of a company in managing its production and labor costs.

Factory Overhead

Factory overhead encompasses all the indirect costs involved in manufacturing a product, which may include utilities, maintenance, and management salaries, excluding direct materials and labor costs.

Direct Labor Costs

The total cost of all the labor force that is directly involved in the production process, measured by wages, salaries, and benefits of those who actually work on the product directly.