Use the Appropriate Letter(s)to Indicate If the Following Costs Would

question 214

Essay

Use the appropriate letter(s)to indicate if the following costs would be found on the income statement of a
A. service company.
B. merchandising company.
C. manufacturing company.
You may use more than one letter for each answer.
________ Revenue
________ Salaries expense
________ Customer service expense
________ Cost of goods manufactured
________ Cost of goods sold

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Definitions:

Overhead Cost

All indirect costs associated with manufacturing or providing a service, not directly traceable to a specific product.

Activity-Based Costing

An accounting method that assigns costs to products and services based on the resources they consume.

Order Filling

The process involved in gathering and packaging goods or materials to fulfil customer orders.

First Stage Allocations

The initial step in activity-based costing where overhead costs are allocated to various activities.