Question

Which of the following would NOT be a line item of a company reporting costs by nature?

(a) Depreciation expense
(b) Salaries expense
(c) Interest expense
(d) Manufacturing expense

Answer 1

In a company reporting costs by nature, manufacturing expense would not be a line item.

Step-by-step explanation:

The answer to the question is (d) Manufacturing expense. This would not be a line item of a company reporting costs by nature. When a company reports costs by nature, it breaks down the costs into broad categories such as raw materials, direct labor, manufacturing overhead, or administrative expenses.Manufacturing expense is a specific type of cost that falls under the category of manufacturing overhead.Therefore, it would be included as a line item in a company's financial statement when reporting costs by function rather than by nature.