Which of the Following Is Not Included in the Purchase

question 39

Multiple Choice

Which of the following is not included in the purchase cost of merchandise inventory?

• A) Purchase discounts
• B) Overhead costs
• C) Freight-in costs
• D) Purchase returns and allowances

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Definitions:

Raw Materials

The basic material from which a product is made, typically used in the manufacturing or production process.

Indirect Cost

Expenses not directly linked to the production of goods or services, such as rent, utilities, and administrative salaries.

Cost Object

Anything for which cost data are desired. Examples of cost objects are products, customers, jobs, and parts of the organization such as departments or divisions.

traceability Of Costs

The ability to assign direct costs to specific cost objects and to allocate indirect costs accurately.