In General,costs Incurred in the Factory That Do Not Qualify

question 69

Multiple Choice

In general,costs incurred in the factory that do not qualify as either direct material or direct labour are called:

• A) manufacturing costs.
• B) manufacturing overhead.
• C) non-manufacturing costs.
• D) selling and administrative costs.

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Definitions:

Widgets

A generic term often used to represent a hypothetical product in economics and business discussions.

Opportunity Cost

The cost of missing out on the second-best option while choosing between two mutually exclusive options in a decision-making process.

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Average Total Cost

The complete expense of manufacturing (encompassing both fixed and variable expenditures) divided by the overall amount of goods produced.