Active Feet,a small manufacturer of shoes,hired an additional vice-president and purchased a barrel of synthetic rubber used to make shoe soles.These two expenses should be considered a(n)____ and a(n)____,respectively.

Question

Quizplus · Accepted Answer

The hiring of an additional vice-president would be considered an overhead cost as it is a fixed cost incurred in the production process. Similarly, the purchase of synthetic rubber used to make shoe soles would be considered a cost of goods sold as it is a variable cost directly associated with the production of the shoes. Therefore, option B which includes overhead cost and cost of goods sold is the best choice.

Active Feet,a Small Manufacturer of Shoes,hired an Additional Vice-President and Purchased