Which of the Following Types of Expenditures Is Not Subject

question 38

Multiple Choice

Which of the following types of expenditures is not subject to capitalization under the UNICAP rules?

• A) selling expenditures
• B) cost of manufacturing labor
• C) compensation of managers who supervise production
• D) cost of raw materials
• E) All of these are subject to capitalization under the UNICAP rules.

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Definitions:

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.

Ownership

The state or fact of owning something, which can involve possessing property, shares in a company, or any asset that grants the owner legal rights and responsibilities.

Horizontal Mergers

A business consolidation that occurs between firms that operate in the same industry or production stage.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, resulting in the average cost per unit of output decreasing with increasing scale.