The Total Cost of Obtaining an Asset,including Such Costs as Purchase

question 65

Multiple Choice

The total cost of obtaining an asset,including such costs as purchase price,transportation,installation,testing,and calibrating in order to ready it for its first productive use is termed as _____.

• A) replacement cost
• B) cost of operating
• C) cost of disposition
• D) acquisition cost

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Definitions:

Finished Goods Inventory

Products that have completed the manufacturing process but have not yet been sold or distributed.

Direct Labour

Workforce directly involved in manufacturing goods or providing services, whose costs are directly attributed to products or services.

Merchandise Inventory

The goods available for sale to customers in retail or wholesale businesses, valued at lower of cost or market value on the balance sheet.