Which of the Following Would Be Included in the Cost

question 52

Multiple Choice

Which of the following would be included in the cost of a constructed building?

• A) Purchase price of the building
• B) Payments for material, labour, and overhead
• C) Survey and legal fees
• D) Realtor commissions
• E) Cost of tearing down old building

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.

Operating Income

A financial metric that shows how much of a company's revenue is left over after paying for variable costs of production like wages and raw materials.

Contribution Format

A method of income statement presentation that separates fixed costs from variable costs to show the contribution margin.