Which of the Following Correctly Describes the Accounting for Administrative

question 137

Multiple Choice

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

• A) Administrative expenses are product costs and are expensed as incurred.
• B) Administrative expenses are period costs and are expensed as incurred.
• C) Administrative expenses are product costs and are expensed when the manufactured product is sold.
• D) Administrative expenses are period costs and are expensed when the manufactured product is sold.

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Definitions:

Total Quality Management

A management approach to long–term success through customer satisfaction, involving all members of an organization in improving processes, products, services, and the culture in which they work.

Inspection Processes

A systematic examination or assessment of various aspects of a product, process, or system to ensure compliance with standards.

Quality Standards

Refers to the established set of criteria outline the acceptable level of product quality or performance.