How should the expense be reported on that year’s financial statements?

On the last day of the year, a total cost of S 150.000 was incurred in indirect labor related to one of the key products an organization makes.

How should the expense be reported on that year’s financial statements?
A . It should be reported as an administrative expense on the income statement.
B. It should be reported as period cost other than a product cost on the management accounts
C. It should be reported as cost of goods sold on the income statement.
D. It should be reported on the balance sheet as part of inventory.

View Answer

Answer: C