Which of the Following Is the Most Significant Cost for a Service

question 55

Multiple Choice

Which of the following is the most significant cost for a service company?

• A) Manufacturing overhead
• B) labour
• C) Supplies
• D) Indirect costs

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Definitions:

Net Operating Income

The profit a company makes after deducting operating expenses from gross profit, not including income and expenses from investments and interest.

Variable Costing

An accounting method that only considers variable costs in determining the cost of products.

Variable Costing

An accounting method that only includes variable production costs (materials, labor, and overhead) in product costs, excluding fixed costs.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and a portion of all overhead costs.