ECONOMICS

Detailed explanation-1: -What is Setup Cost? Setup cost is those costs incurred to configure a machine for a production run. This cost is considered a fixed cost of the associated batch, so its cost is spread over the number of units produced.

Detailed explanation-2: -The correct answer is c. They are first recorded in an inventory account. Product costs are costs to be recorded as part of inventory: Raw materials inventory if the materials were not yet used in the production.

Detailed explanation-3: -Operating expenses, operating expenditures, or “opex, ” refers to the costs incurred by a business for its operational activities. In other words, operating expenses are the costs that a company must make to perform its operational activities.