Which of the Following Costs Is Most Likely Relevant in Deciding

question 32

Multiple Choice

Which of the following costs is most likely relevant in deciding whether to accept a special order?

• A)Direct material, variable overhead, and fixed overhead
• B)Variable overhead, fixed overhead, and direct labor
• C)Direct material, direct labor, and variable overhead
• D)Direct material and direct labor

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Definitions:

Administrative Expense

Overhead or general expenses related to the administration of a business, not directly tied to any specific department or product.

Expected Net Income

The projected profit of a business after all expenses and taxes have been deducted from total revenue.

Sales Commission

A fee paid to sales personnel, often calculated as a percentage of the sales they generate.

Machine-Hours

A unit of measure for the amount of work or operation time a machine has completed or is expected to complete.