Absorption Costing Differs from Variable Costing in All of the Following

question 73

Multiple Choice

Absorption costing differs from variable costing in all of the following except

• A)treatment of fixed manufacturing overhead.
• B)treatment of variable production costs.
• C)acceptability for external reporting.
• D)arrangement of the income statement.

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Definitions:

Return On Assets

A financial ratio indicating how efficiently a company uses its assets to generate profit.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's profitability.

Total Assets

The summation of all resources owned by an entity, valued based on historical cost or market value, represented in the balance sheet.

Return On Assets Ratio

The Return on Assets Ratio is a financial metric used to assess how efficiently a company uses its assets to generate profit, calculated by dividing net income by total assets.