Which of the Following Is NOT One of the Costs

question 4

Multiple Choice

Which of the following is NOT one of the costs considered in aggregate production planning?

• A)Subcontracting cost.
• B)Capital equipment cost.
• C)Inventory cost.
• D)Firing (layoff) cost.
• E)All of these are considered in aggregate production planning.

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Definitions:

Fixed Expense

An expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Administrative Expense

Costs related to the general administration of a business, including office supplies, salaries of administrative personnel, and utilities.

Freight-Out

The cost of shipping goods to customers, which is typically recorded as a selling expense.

Production Budget

A plan that outlines the number of units to be produced within a specific period to meet anticipated sales and inventory needs.