The Cost of Labor That Is Not Clearly Associated with Specific

question 144

Multiple Choice

The cost of labor that is not clearly associated with specific units or batches of product is called:

• A) Unspecified labor.
• B) Direct labor.
• C) Indirect labor.
• D) Basic labor.
• E) Joint labor.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and equipment costs.

Net Income

The net income of a business following the deduction of all costs and taxes from its earnings.