Which of the Following Items Would Be Reported Directly on the Income

question 22

Multiple Choice

Which of the following items would be reported directly on the income statement as a period cost?

• A) Selling and administrative salaries
• B) Cost of lubricant for oiling machinery
• C) Wages paid to machine operators
• D) All of these

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Definitions:

Activity Level

A measure of the volume of production or operations, which can impact costs and profitability within a business.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs more accurately.

Variances

The difference between planned or expected financial outcomes and the actual results, often analyzed in budgeting and cost management.

Performance Reports

Documents that compare actual work performance against planned or expected outcomes.