Global Networcks Has Processed and Archived a Large Amount of Data

question 68

Multiple Choice

Global Networcks has processed and archived a large amount of data on its servers. Due to technical faults in its servers, it could not access the data. The company had to pay $300,000 to external technicians to regain access to its data. The cost incurred by Global Networcks is an example of _____.

• A) acquisition cost
• B) processing cost
• C) storage cost
• D) retrieval cost

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Definitions:

Absorption Costing

A method of cost accounting that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

A costing method where only variable manufacturing costs are included in the cost of goods sold, with fixed manufacturing overhead treated as a period expense.

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs, reflecting the actual profitability.