When Absorption Costing Is Used

question 11

Multiple Choice

When absorption costing is used:

• A)Production inefficiencies are immediately identified.
• B)Production to absorb the cost of waste and yield factors not considered in other costing methods.
• C)Both variable and fixed costs are included in unit costs.
• D)The transfer of values to the income statement through inventory accounts.

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Definitions:

Expectancy Theory

A psychological theory that describes the motivational relationship between people's expectations for success, their perceived efforts, and their ultimate performance.

Rewards

The benefits or compensation received in recognition of one's effort, achievement, or service.

Performance

The act of carrying out a task or function; how well an individual or group meets established goals or standards.

Dysfunctional Methods

Ineffective or harmful practices or techniques that hinder the achievement of objectives or damage organizational culture.