A Common Classification of Costs Is by Business Function

question 135

Multiple Choice

A common classification of costs is by business function. Which of the following classifications is not by business function?

• A) cost object
• B) research and development
• C) distribution
• D) production

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Definitions:

Graph

A diagram representing data visually, using lines, bars, or other symbols.

Implicit Cost

Refers to the opportunity costs that are not directly paid for in money but represent the loss of value from using resources for a particular venture instead of their best alternative use.

Explicit Cost

Direct, out-of-pocket payments for goods or services used in the production of a product or offering of a service.

Sole Proprietor

An individual who owns and operates a business alone, bearing all the responsibilities and benefits of the business.