‘Cost of software licenses’ would be classified as ______________________ i. Developmental cost ii. Operational cost iii. Variable cost iv. Direct cost

Question

BlackTom AI · Accepted Answer

The question asks how 'Cost of software licenses' would be classified among four cost categories.
Option a: i, iv (Developmental cost and Direct cost). Developmental cost relates to costs incurred during product development, and Direct cost is traceable to a specific cost object. Software license costs are not typically developmental or directly tied to a specific development activity in most standard classifications, making this pairing unlikely.
Option b: ii, iv (Operational cost and Direct cost). Operational costs are the ongoing expenses of running a business or delivering a product or service; software licenses are typically ongoing operational expenses (unless capitalized under certain accounting policies). Direct cost is appropriate if the license cost can be directly attributed to a particular product or project, which is often the case when the license is used for a specific product. This combination correctly reflects two plausible classifications for software licenses: they are light on development context (not primarily developmental) and can be direct if tied to a specific output.
Option c: ii, iii, iv (Operational cost, Variable cost, and Direct cost). While software licenses can be operational and sometimes variable, the inclusion of Variable cost is not universally appropriate for licenses, as many license fees are fixed (e.g., per-seat or per-period), so labeling them as variable may be misleading.
Option d: i, ii, iv (Developmental cost, Operational cost, and Direct cost). Including Developmental cost is questionable for license fees, since they are usually not incurred primarily for development work, and this option unnecessarily broadens the classification.
Overall, the most defensible pairing for typical treatment of 'Cost of software licenses' is ii and iv, recognizing it as an ongoing operational expense that can be a direct cost when linked to a specific product or project.

‘Cost of software licenses’ would be classified as ______________________ i. Developmental cost ii. Operational cost iii. Variable cost iv. Direct costSingle choice

Similar Questions

Which of the following is a noncontrollable expense?

Costs that are not easily traceable to a specific cost object are known as:

Question at position 10 Which of the following is not a variable expense?Janitorial ExpensesManagement FeesUtilitiesReal Estate Taxes

Which of the following is not a product cost?

A classification of costs that determines whether a cost is expensed to the income statement or capitalized to inventory is:

Direct costs are typically subdivided into which four categories?

Which of the following insurance costs are classified under Home Office Overheads rather than project indirect costs?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler