Which of the Following Would Be Considered an Actual Cost

question 45

Multiple Choice

Which of the following would be considered an actual cost of a current period?

• A) The $25 of materials in a manufactured chair that is ready to be shipped to the customer
• B) The $22 of direct material cost per unit assumed in the actual budget of a manufacturer of chairs
• C) The expected cost of materials for a chair as a result of engineering specifications
• D) The average of historical material cost data for a chair manufactured in several past accounting periods

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Definitions:

Fiscal-Year End

The completion of a one-year, or 12-month, accounting period used by governments and businesses for financial reporting and budgeting.

Automatic Extension

An extension of time granted by the IRS for filing tax returns without needing to file a request form.

C Corporation

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.

Return

A document containing details about an individual's or entity's income, deductions, and tax liabilities filed with the tax authorities.