Under Absorption Costing, Which of the Following Costs Would Not

question 53

Multiple Choice

Under absorption costing, which of the following costs would not be included in finished goods inventory?

• A)direct labor cost
• B)direct materials cost
• C)variable and fixed factory overhead cost
• D)variable and fixed selling and administrative expenses

---

Definitions:

Unearned Revenues

Money received by a company for goods or services that have not yet been delivered or performed.

Accrued Expenses

Expenses that have been incurred but not yet paid, typically recorded through adjusting journal entries in the accounting process.

Prepaid Expenses

Costs incurred beforehand for products or services that will be obtained at a later date.

Property Taxes

Taxes assessed on real estate and sometimes personal property, based on the assessed value of the property.