The Finance Department of Neptune Industries Has to Audit Expenses

question 78

Multiple Choice

The Finance Department of Neptune Industries has to audit expenses and profits made each year.It creates separate databases for costs accrued in the form of equipment used in the company and for other costs such as costs of accounting, rent, and managerial salaries.Which of the following is the subject of economies of scale in the described scenario?

• A)Research and development expenses
• B)General and administrative costs
• C)Incentives and promotional costs
• D)Advertising expenses

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue, indicating the efficiency of a company in managing its production and labor costs.

Net Operating Income

A company's revenue minus its operating expenses, excluding taxes and interest, providing a measure of profitability from its core business activities.

Variable Costing

An accounting method in which variable production costs are included in product costs, while fixed overhead costs are treated as period expenses.

Common Fixed Expense

Overhead costs that are not directly attributed to a specific product or service but are shared across multiple business segments.