Analysts Short-Term Earnings Forecasts Tend to Be Too Optimistic

question 65

True/False

Analysts short-term earnings forecasts tend to be too optimistic.

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Definitions:

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost calculation, contrasting with absorption costing that also includes fixed costs.

Product Costs

Costs that are incurred to create a product that is intended for sale to customers. This includes direct materials, direct labor, and manufacturing overhead.

Direct Labor

Costs associated with employees who are directly involved in the production of goods or the provision of services, such as wages for factory workers.

Direct Materials

Direct materials are the raw materials that can be directly traced to the production of goods.