Select the Correct Statement from the Following

question 41

Multiple Choice

Select the correct statement from the following.

• A) The allocation base determines whether a cost is classified as direct or indirect.
• B) The same cost cannot be classified as both direct and indirect.
• C) Relevant costs can include direct and indirect costs.
• D) Direct costs always display a variable behavior pattern.

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Definitions:

Subsidiary Ledger

A Subsidiary Ledger is a ledger containing all details of transactions for a specific account, which then summarizes into a single line in the General Ledger.

Work In Process Inventory

Goods that are in the process of being manufactured but are not yet completed, representing a component of a company's inventory.

Finished Goods Inventory

Items that have been completed by the manufacturing process and are ready for sale to customers.

Control Accounts

General ledger accounts that summarize the balances of a group of subsidiary accounts, facilitating the organization and verification of financial information.