Accounting · Cost Accounting
Which of the following statements is correct regarding the classification and responsibility of costs within an organization?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1As production volume increases, the total fixed cost per unit will remain constant within the relevant range.
- 2Inventory valuation for internal reporting purposes must exclude all production overheads to comply with management accounting principles.
- 3Royalties paid to a designer for every unit of a product manufactured and sold are classified as a direct expense.✓
- 4The manager of a revenue centre is responsible for both the sales income and the direct variable costs incurred to achieve those sales.
Correct answer
Royalties paid to a designer for every unit of a product manufactured and sold are classified as a direct expense.
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