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Which of the following statements is true? Select one: a. Variable cost per unit are affected...

Which of the following statements is true?

Select one: a. Variable cost per unit are affected by changes in activity level.

b. Period costs are found only in manufacturing companies, not in merchandising companies.

c. Depreciation on office equipment would not be included in cost of goods manufactured.

d. A publisher that sells its books through agents who are paid a constant percentage commission on each book sold would classify the commission as a fixed cost.

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Answer #1

Answer - The Correct answer is C) Depreciation on office equipment would not be included in cost of goods manufactured.

Because Depreciation on office equipment is not directly related with the Production and Hence it is Not Included in Cost of goods Manufactured.

A. is Incorrect as Variable cost per unit remains constant irrespective of Level of Activity.

B. is Incorrect as Period costs Occur in Merchandising companies also.

D. is Incorrect as the Amount of Commission is Variable cost as it will vary based on no. of Units Sold.

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