Match the Items Below to the Appropriate Term (A-D)

question 54

Short Answer

Match the items below to the appropriate term (a-d).
-Cost of primary material used to make a product
A)Direct materials
B)Selling and administrative expense
C)Factory overhead
D)Direct labor

• A)Direct materials
• B)Selling and administrative expense
• C)Factory overhead
• D)Direct labor

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Definitions:

Marginal Cost

The rise in expenses for the production of an additional unit of a product or service.

Downstream Division

A sector of a company or industry that focuses on the final stages of production and distribution to end-users, often involving refining, selling, and distribution processes.

Transfer Price

The price at which goods and services are sold between departments or subsidiaries within the same company.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, employee wages, and insurance fees.