Which One of the Following Items Is Normally Not a Manufacturing

question 8

Multiple Choice

Which one of the following items is normally not a manufacturing cost?

• A) Direct materials.
• B) Factory overhead.
• C) General and administrative expenses.
• D) Direct labor.
• E) Conversion cost.

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Definitions:

Minimum Required Rate

The lowest rate of return that an investment must yield to be considered acceptable, often tied to the cost of capital or inflation.

Investment Opportunity

A financial investment or asset that has the potential to yield returns or profits.

Residual Income

The income that remains after deducting all required costs of capital from the operating income, used as a performance measure.

Minimum Required Rate

is the lowest return or yield that an investor is willing to accept on an investment, considering the risk involved.