Which of the Following Items Would Be Reported Directly on the Income

question 22

Multiple Choice

Which of the following items would be reported directly on the income statement as a period cost?

• A) Selling and administrative salaries
• B) Cost of lubricant for oiling machinery
• C) Wages paid to machine operators
• D) All of these

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Definitions:

Profitable Product

A product that generates more revenue than the costs involved in its production, marketing, and distribution.

Variable Selling Expense

Costs that vary directly with the volume of sales, including commissions and shipping fees.

Specialized Machine

Equipment designed for a specific purpose or task in the production process, often custom-built or highly specialized.

Financial Advantage

The benefit or gain in financial terms that an entity has, allowing it to achieve better results than others.