Under the Absorption-Cost Approach, All of the Following Are Included

question 80

Multiple Choice

Under the absorption-cost approach, all of the following are included in the cost base except

• A) direct materials.
• B) fixed manufacturing overhead.
• C) selling and administrative costs.
• D) variable manufacturing overhead.

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Definitions:

Invoice

A document issued by a seller to a buyer that specifies the products or services sold, quantities, and agreed prices for products or services provided.

Interest Days

The total number of days over which interest is calculated on a loan or investment.

Interest-Bearing Note

A note that has a maturity value greater than its face value.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.