Net Income Will Result When

question 70

Multiple Choice

Net income will result when

• A) revenues (credits) > expenses (debits)
• B) revenues (debits) > expenses (credits)
• C) expenses (credits) = revenues (debits)
• D) revenues (credits) = expenses (debits)

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor.

Controllable Variance

The difference between actual and expected amounts that can be directly managed or controlled by responsible individuals.

Fixed Overhead Costs

Indirect expenses of running a business that are not affected by changes in the volume of goods or services produced, such as rent, salaries, and insurance.

Overhead Costs

Ongoing expenses related to the operation of a business, such as rent, utilities, and insurance, that are not directly tied to production.