What three categories separate the expenses on a manufacturer's income statement?
A)production, period, and indirect
B)materials, work in process, and finished goods
C)production, selling, and administrative
D)variable, fixed, and direct

Question

Quizplus · Accepted Answer

The three categories that typically separate expenses on a manufacturer's income statement are production, selling, and administrative expenses. Production expenses relate to the costs of producing goods, such as labor and raw materials. Selling expenses are expenses associated with marketing and selling the products, such as advertising and sales commissions. Administrative expenses are general overhead costs that are not directly tied to production or selling, such as rent and salaries for administrative staff. Option A is incorrect because it does not include selling expenses. Option B is incorrect because it categorizes expenses by the stage of completion of the product, not by the type of expense. Option D is incorrect because it does not include administrative expenses.

What Three Categories Separate the Expenses on a Manufacturer's Income