Makwa Industries Has Developed Two New Products but Has Only

question 75

Multiple Choice

Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products. The advertising costs for the product selected by Makwa will be

• A)Prime costs.
• B)Conversion costs.
• C)Period costs.
• D)Opportunity costs.

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Definitions:

Gain or Loss

The difference in value from when an asset is purchased to when it is sold, determining whether a transaction has resulted in a profit or loss.

Classification

In the context of finance and business, classification refers to the categorization or grouping of items, assets, or transactions based on certain criteria or characteristics, often for reporting, analysis, or regulatory compliance.

Inherited Property

Property one receives from a deceased person's estate, subject to specific tax rules and basis determinations.

Inventory

Goods and materials a business holds for the ultimate goal of resale or production.