A Basic Concept of Variable Costing Is That Period Costs

question 29

Multiple Choice

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?

• A)Period costs are uncontrollable and should not be charged to a specific product.
• B)Period costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits.
• C)Allocation of period costs is arbitrary at best and could lead to erroneous decision by management.
• D)Because period costs will occur whether production occurs,it is improper to allocate these costs to production and defer a current cost of doing business.

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Definitions:

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences, including the context and emotions associated with them.

Procedural Memories

A type of long-term memory involved in the acquisition of skills and habits, referring to how things are done.

Consolidation

The process by which memories become stable in the brain, transitioning from a short-term to a long-term state, making them more resistant to interference or forgetting.

Chunking

A memory technique that involves grouping individual pieces of information together to improve recall.