Selecting a Volume?related Cost Driver and Classifying Each Account as a Variable

question 85

Multiple Choice

Selecting a volume?related cost driver and classifying each account as a variable cost or a fixed cost is called_____.

• A)engineering analysis
• B)high?low analysis
• C)visual?fit analysis
• D)account analysis

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Definitions:

Work in Progress

Inventory that has begun the manufacturing process but is not yet completed.

Merchandise Inventory

The total cost of all the goods a company intends to sell to customers that are available at any given time, reflected as a current asset on the balance sheet.

Raw Materials

Relates to the basic substances in their natural, modified, or semi-processed states used as inputs for manufacturing finished goods.

Physical Possession

The actual holding or occupying of an object, property, or asset by an individual or entity.