Which of the following costs would appear on the income statements for both a merchandiser and manufacturer?
A) Cost of goods manufactured
B) Direct labour incurred
C) Direct materials used
D) Operating expenses

Question

Quizplus · Accepted Answer

Operating expenses such as rent, utilities, and salaries would appear on both the income statements of a merchandiser and manufacturer, as they are necessary expenses to operate the business. However, costs such as cost of goods manufactured (specifically for a manufacturer) and direct materials used (can vary for a merchandiser depending on the inventory method used) are unique to each type of business and may not appear on the income statement of the other. Direct labor incurred is also unique to manufacturers and would not appear on a merchandiser's income statement.

Which of the Following Costs Would Appear on the Income