Which of These Costs Is NOT an Indirect Production Cost

question 110

Multiple Choice

Which of these costs is NOT an indirect production cost for a manufactured chair?

• A)rental cost of factory building
• B)depreciation expense on factory equipment
• C)cost of legal staff to identify legal issues associated with the chair
• D)salary of factory supervisor

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Definitions:

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting.

Research and Development

Activities undertaken by a business to develop new products or improve existing ones, often involving innovation and technological advancement.

Capitalized

The process of recording an expenditure as an asset, rather than an expense, allowing a company to spread out the cost over time.

Natural Resource Depletion

The consumption of natural resources faster than they can be replenished, specifically accounted for in the valuation and depreciation of such resources by companies.