In the United States,SFAS 130 Requires Which Profit Figure to Be

question 4

Multiple Choice

In the United States,SFAS 130 requires which profit figure to be disclosed?

• A) Profit after tax after applying all other accounting standards
• B) The comprehensive income figure which includes all income and expenses that have previously bypassed the profit calculation after tax and been taken directly to equity
• C) Neither A nor B
• D) Both A and B

---

Definitions:

Total Cost

The complete sum of expenses incurred by a business in producing goods or services, including manufacturing, labor, and overhead costs.

Direct and Indirect Materials

Direct materials are raw materials that can be directly attributed to the production of goods, whereas indirect materials are secondary supplies not directly part of the final product.

Economies of Scale

The cost advantage organizations achieve due to an increase in scale of production, leading to a reduction in the per-unit cost.

Indirect Materials

Items that are used during the production process but do not become part of the final product, such as lubricants for machinery or cleaning supplies.