Under GAAP, Which One of the Following Types of Costs

question 42

Multiple Choice

Under GAAP, which one of the following types of costs should not be capitalized?

• A)rearrangements
• B)routine maintenance
• C)replacements
• D)additions

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Definitions:

Per-Unit Standards

Estimates of the direct materials, direct labor, and manufacturing overhead costs required to produce one unit of a product.

Direct Labor Price Variance

The difference between the actual cost of direct labor and the expected (or standard) cost of direct labor used during production.

Direct Labor Payroll

The total amount of money paid to employees directly involved in manufacturing products or providing services.

Standard Rate of Pay

The regular amount of pay given for standard work hours or for performing a standard task or job.