The Following Are All Examples of Product Costs

question 100

Multiple Choice

The following are all examples of product costs:

• A) Direct material, direct labor and indirect labor.
• B) Direct labor, VP of sales salary, and insurance on the factory.
• C) Depreciation on the factory equipment, depreciation on the office building, and depreciation on the factory building.
• D) Factory insurance, interest expense, and property taxes on the factory.
• E) Office supplies, sales commissions, and maintenance costs on office copier.

Identify and explain the concept of cost behavior.

Analyze the impact of activity level changes within the relevant range on cost behavior.

Grasp the concepts of cost prediction, estimation, and the role of cost functions.

Learn methods of cost estimation, including visual fit and regression analysis.

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Definitions:

Corporation

A business structure that creates an entity separate from its owners and managers.

Public Company

A corporation whose shares are traded openly on stock exchanges, subject to regulatory oversight and required to disclose financial and other significant information.

Certified Public Accountant

A designation given to an accountant who has passed a standardized CPA exam and met government-mandated work experience and education requirements.

Sole Proprietorship

A sole proprietorship is a business owned and operated by one person, where there is no legal distinction between the owner and the business entity.