Extraction Costs of a Nonrenewable Resource Include the

question 218

Multiple Choice

Extraction costs of a nonrenewable resource include the

• A) cost of removal from the ground only.
• B) cost of removal from the ground plus the cost of preparation for sale.
• C) cost of removal from the ground, the cost of preparation for sale, and the cost of not being able to extract and sell the resource in the future.
• D) cost of removal from the ground plus replanting costs.

---

Definitions:

Supplies Cost

The cost associated with materials and items that are consumed or used in the process of producing goods or providing services.

Machine-Hours

A measure of production output or capacity based on the number of hours a machine operates.

Variable Overhead Rate Variance

represents the difference between the actual variable overhead incurred and the standard variable overhead allocated for the actual production achieved.

Manufacturing Overhead

The total of all the indirect costs involved in manufacturing a product, which can include expenses related to equipment maintenance, factory rent, and utilities.