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:

Authorized Stock

The upper limit of shares a corporation is allowed to issue, according to its founding documents.

Par Value

The nominal or face value of a stock or bond, as stated by the issuing company.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote on corporate matters and receive dividends.

Paid-In Capital

Represents the funds raised by a company through the sale of its own shares rather than through borrowed capital or earnings.