For Inventoriable Costs to Become Expenses Under the Matching Principle

question 192

Multiple Choice

For inventoriable costs to become expenses under the matching principle

• A) the product must be finished and in stock.
• B) the product must be expensed based on its percentage-of-completion.
• C) the product to which they attach must be sold.
• D) all accounts payable must be settled.

---

Definitions:

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance payments.

Losing Money

Losing money describes a situation where an individual or business expends more money than is received over a certain period, resulting in financial loss.

Average Variable Cost

The sum of all costs that vary with output levels, divided by the total number of units produced.

Marginal Cost

The increase or decrease in total production cost when producing one additional unit of a good.