Select the Appropriate Classification for Each of the Costs Incurred

question 5

Multiple Choice

Select the appropriate classification for each of the costs incurred by a manufacturer of bicycles.
-Factory supply costs

• A)Direct materials
• B)Direct labour
• C)Overhead
• D)Selling expense
• E)Administrative expense

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Definitions:

Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.

Shelter Principle

A legal doctrine in property law that allows a person who acquires property in good faith and without notice of prior claims to be protected from those claims.

Holder

In financial terms, an individual or entity that possesses a negotiable instrument, such as a check or bond, legally.

Holder In Due Course

A legal term for a person who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be asserted against the original payee.