Which of the Following Costs Would Appear on the Income

question 54

Multiple Choice

Which of the following costs would appear on the income statements for both a merchandiser and manufacturer?

• A)Cost of goods manufactured
• B)Direct labor incurred
• C)Direct materials used
• D)Operating expenses

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Definitions:

Nominal Wages

Wages that are paid to employees not adjusted for inflation, representing the dollar amount received.

Real Wages

Wages adjusted for inflation, representing the purchasing power of the income received from work.

Human Capital

The combined abilities, expertise, and non-physical assets of people that can be leveraged to generate economic worth.

Future Earnings

Refers to the projected income or profits that an individual, company, or asset is expected to generate in the future.