Which of the Following Costs Is Most Likely to Be

question 95

Multiple Choice

Which of the following costs is most likely to be the largest expense reported on the income statement of a merchandiser,such as Walmart Stores,Inc.?

• A)Utilities expense.
• B)Cost of goods sold.
• C)Advertising expense.
• D)Income tax expense.

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Definitions:

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of production, such as rent, property taxes, and insurance.

Variances

The differences between planned or expected financial outcomes and the actual financial outcomes.

Fixed Overhead

The portion of overhead costs that remains constant regardless of the level of production or business activity.

Direct Labor

The labor costs directly tied to the production of goods or services, such as wages paid to employees who physically produce a product.