An EXCEPTION to the General Rule That Costs Should Be

question 370

Multiple Choice

An EXCEPTION to the general rule that costs should be charged to expense in the period incurred is

• A)factory overhead costs incurred on a product manufactured but not sold during the current
• Accounting period.
• B)interest costs for financing of inventories that are routinely manufactured in large
• Quantities on a repetitive basis.
• C)general and administrative fixed costs incurred in connection with the purchase of
• D)sales commission and salary costs incurred in connection with the sale of inventory.

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Definitions:

Pocket Money

Usually small amounts of money given to children by their parents on a regular basis.

Hard Candies

Small, flavored sugar candies that are solid at room temperature, often sucked rather than chewed.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Utility-Maximizing Amounts

Quantities of goods and services consumers choose in order to reach the highest level of satisfaction.