Asked by Samende Kamana on Apr 28, 2024
Verified
The salary paid to the president of a company would be classified on the income statement as a(n) :
A) administrative expense.
B) direct labor cost.
C) manufacturing overhead cost.
D) selling expense.
Administrative Expense
Costs related to the general management and administration of a company, such as salaries of executive personnel, accounting departments, and front office.
Direct Labor Cost
The cost associated with employees who directly contribute to the production of goods, such as wages for factory workers.
Income Statement
A financial report that shows a company's revenues, expenses, and net income over a specific period.
- Pinpoint and differentiate product versus period costs, as well as their impact on financial reporting.
Verified Answer
SF
Seiria FieldsMay 01, 2024
Final Answer :
A
Explanation :
The salary paid to the president of a company would be classified as an administrative expense, as it is a cost incurred in the general administration or management of the company. It is not directly related to the manufacturing or selling of products, nor is it considered part of direct labor costs.
Learning Objectives
- Pinpoint and differentiate product versus period costs, as well as their impact on financial reporting.