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If you have difficulty answering the following questions, learn more about this topic by reading our Explanation of Nonmanufacturing Overhead.

1.

Selling expenses should be allocated to the cost of goods sold for external financial reporting.

True

False

2.

According to U.S. accounting principles, interest expense is an indirect product cost.

True

False

3.	SG&A is the acronym for _______________, ________________ and _________________ expenses.

4.	SG&A expenses can be classified as _______________ costs.
period              product

5.

Commissions expense is part of the cost of goods sold.

True

False

6.

SG&A expenses can vary between products and between customers.

True

False

7.

Activity based costing is recommended for the allocation of SG&A expenses in order to determine the true profitability of a product or a customer.

True

False