If Selling and Administrative Expenses Are Allocated to Different Products

question 35

Multiple Choice

If selling and administrative expenses are allocated to different products, they should be reported as a

• A) product cost
• B) factory overhead cost
• C) period cost
• D) cost of goods sold

---

Definitions:

Convex

A shape or function where a line segment between any two points on its boundary or graph lies above or on the shape or graph.

Transitivity

In decision theory, the principle that if a person prefers option A to B and B to C, then they should prefer A to C.

Diminishing Marginal

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit will eventually decline.

Indifference Curves

A graphical representation of different combinations of goods or services among which a consumer is indifferent, showing preferences and trade-offs.