Which of the Following Is an Example of a Cost

question 105

Multiple Choice

Which of the following is an example of a cost of goods sold for a manufacturer of electric fans?

• A) overtime hours needed to fill a large summer order
• B) the office phone bill
• C) sales commissions
• D) factory utilities

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Definitions:

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as return divided by the cost of the investment.

Support Department Allocation Rate

A rate used to allocate the costs of support departments to producing departments or directly to products based on relevant factors or usage measures.

Cost Drivers

Factors that cause the cost of an activity or product to change, such as production volume or raw material prices.

Support Department Cost

Expenses related to the functions that assist the direct operations or production departments of a business, such as human resources or maintenance.