Which of the Following Applies to the Raw Materials Used

question 17

Multiple Choice

Which of the following applies to the raw materials used by a manufacturing company?

• A) Materials inventory
• B) Work in process inventory
• C) Merchandise inventory
• D) Finished goods inventory

---

Definitions:

Accounting

The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business or individual.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Indirect Costs

Costs that are not directly traceable to a product, process, or activity but are necessary for the business’s overall operations, such as utilities or administrative salaries.

Stock Issue Costs

Expenses associated with issuing new shares of stock, including underwriting, legal, and registration fees.