A Common Cost Is

question 84

Multiple Choice

A common cost is:

• A) not easily related to any business unit's activities.
• B) avoidable.
• C) employees' wages.
• D) direct labour.

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Definitions:

Direct Labor

The workforce directly involved in manufacturing goods or providing services, whose wages are considered part of the cost of goods sold or cost of services.

Factory Overhead

The total indirect costs associated with manufacturing, excluding direct labor and direct materials.

Direct Materials

Raw materials that can be directly attributed to the production of finished goods in a manufacturing process.

Salesperson Commissions

Payments made to sales staff based on a percentage of the sales they generate, used as an incentive to increase sales performance.