Which of the Following Expenses Incurred by the Sporting Goods

question 18

Multiple Choice

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

• A) depreciation expense-office equipment
• B) insurance on inventory of sporting goods
• C) uncollectible accounts expense
• D) office salaries

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Definitions:

Natural Monopoly

A market condition where a single supplier is most efficient in producing a good or service due to high initial costs and substantial economies of scale.

Marginal Cost

The augmentation in cumulative costs linked with generating an extra unit of a product or service.

Average Cost

The overall expense of manufacturing split by the quantity of units made.

Rate of Return

The increase or decrease in value of an investment throughout a determined period, shown as a percent of the investment’s initial cost.