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 additional vice president's salary is an operating expense because it's part of the company's overhead and not directly tied to the production of goods. The barrel of synthetic rubber is a cost of goods sold (COGS) because it is a direct material used in the production of the shoes.

Active Feet, a Small Manufacturer of Shoes, Hired an Additional