Which of the Following Statements Is Correct

question 59

Multiple Choice

Which of the following statements is correct?

• A) Power used for factory lighting and heating is classified as a period cost.
• B) Absorption costing splits up factory costs into product and period costs.
• C) The cost of collecting debts from customers is classified as part of factory overhead.
• D) Items such as glue, nails and screws become part of the finished product but are usually classified as factory overhead.

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Definitions:

Law of Demand

An economic principle stating that as the price of a good increases, the demand for that good decreases, and vice versa.

Steak

A cut of meat, typically beef, that is sliced perpendicular to the muscle fibers, often grilled or pan-fried.

Rhode Island

The smallest U.S. state by area, located in the New England region.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite of normal goods.