All of the Following Costs Are Included in Inventory Under

question 118

Multiple Choice

All of the following costs are included in inventory under absorption costing except

• A) direct materials.
• B) direct labor.
• C) fixed selling expenses.
• D) fixed factory overhead.

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Definitions:

Standard Labor Hours

The predetermined amount of time expected to be required to complete a specific task or job.

Actual Costs

The true, total costs incurred for processes or products, including all direct and indirect expenses.

Direct Labor

The wages paid to workers who are directly involved in the production of goods or services.

Time Variance

The difference between actual time taken to perform an activity and the expected time.