Indirect Costs

question 67

Multiple Choice

Indirect costs:

• A)can be traced to a cost object.
• B)cannot be traced to a particular cost object.
• C)are always fixed.
• D)are always variable.
• E)may be indirect with respect to Disney World but direct with respect to one of its major components, Epcot Center.

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Definitions:

Net Income

The remaining revenue after all costs, expenses, and taxes have been subtracted from a company's total revenue; essentially, a company's profit.

Periodic Inventory

An inventory system in which the inventory count is conducted at specific periods, determining the cost of goods sold by beginning inventory plus purchases minus ending inventory.

Merchandise Inventory

Goods a company intends to sell to customers that are stored as inventory.

Purchases

Represents the total amount of goods bought by a business for resale or for use in production.