Expenses That Are Not Easily Associated with a Specific Department

question 149

Multiple Choice

Expenses that are not easily associated with a specific department, and which are incurred for the benefit of more than one department, are:

• A) Fixed expenses.
• B) Indirect expenses.
• C) Direct expenses.
• D) Uncontrollable expenses.
• E) Variable expenses.

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Definitions:

Selling

The process of promoting and transferring goods or services to a buyer in exchange for money.

Contribution Margin Ratio

The percentage of each dollar of sales that is available to apply to fixed costs and contribute to net income; calculated as unit contribution margin divided by unit selling price.

Unit Contribution Margin

The amount of revenue remaining per unit after deducting variable costs; calculated as unit selling price minus unit variable costs.

Unit Sales Price

The amount that a business charges for one unit of its product or service.