An Additional Cost Incurred Only If a Particular Action Is

question 56

Multiple Choice

An additional cost incurred only if a particular action is taken is a(n) :

• A) Period cost.
• B) Pocket cost.
• C) Discount cost.
• D) Incremental cost.
• E) Sunk cost.

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Definitions:

Raw Materials Inventory

Raw materials inventory represents the cost of materials that are in stock but have not yet been processed into finished goods.

Direct Labor Cost

The compensation and associated costs for workers directly engaged in the manufacturing of products or services.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries of supervisors.

Total Manufacturing Costs

The sum of direct materials, direct labor, and manufacturing overhead incurred in producing goods.