Which of the following statements about how a manufacturer categorizes its costs and expenses is True?
A)The manufacturer of a laser printer would categorize the cost of shipping that printer as a specific expense
B)A sales promotion display for selling vinyl siding would be a general expense if the territory were the object of measurement
C)The salary of the product line manager would be an example of a direct cost if the territory were the object of measurement
D)The travel expenses for a pharmaceutical salesperson who sells multiple products would be an example of a direct cost
E)Advertising is a specific expense

Question

Quizplus · Accepted Answer

The cost of shipping the printer is directly related to the production of the printer, so it would be considered a specific expense.

Answer: B
 The sales promotion display is not directly related to the production of the vinyl siding itself, so it would be considered a general expense if the object of measurement were the territory.

Answer: C
 The product line manager's salary is directly related to the production of the product line, so it would be considered a direct cost if the object of measurement were the product line.

Answer: D
 The travel expenses are directly related to the sales of the products, so they would be considered a direct cost.

Answer: E
 Advertising can be either a specific expense or a general expense, depending on how it is used and what it is promoting. It is not always a specific expense.

Which of the Following Statements About How a Manufacturer Categorizes