If the Total Warehousing Cost for the Year Amounts to $350,000,and

question 179

Multiple Choice

If the total warehousing cost for the year amounts to $350,000,and 40 percent of the warehousing activity is associated with finished goods and 60 percent with direct materials,how much of the cost would be charged as a product cost?

• A)$70,000
• B)$140,000
• C)$210,000
• D)$350,000

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services delivered but not yet paid for.

Without Recourse

A term indicating that the seller of an asset is not responsible for the buyer's losses if the asset fails to perform as expected.

Bad Debt Risk

The probability that loans or receivables will not be collected and will result in a loss for the lender or creditor.

Commitment Fee

A banking charge imposed on a borrower to keep a line of credit open or to guarantee a loan's terms.