The Purpose of a Statement of Functional Expenses Is To

question 54

Multiple Choice

The purpose of a statement of functional expenses is to:

• A) Report on the net income of each program and the related direct and indirect expenses.
• B) Report on program expenses and supporting expenses.
• C) Report on the natural expenses (object-of-expense), as well as program and support functions expenses.
• D) Report on the cash flows of each program and that of supporting the programs.

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Definitions:

Conversion Costs

The total cost of converting raw materials into finished goods, including both direct labor and manufacturing overhead.

Work in Process

Inventory that is in the production process and is not yet completed.

Equivalent Units

Equivalent units are a concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully completed units.

Bottling Department

A segment of a manufacturing facility where products, typically liquids, are placed into bottles for distribution.