One Reason We Have Seen Continued Growth in Home-Based Businesses

question 287

Multiple Choice

One reason we have seen continued growth in home-based businesses is:

• A)the location offers a more secure operational environment.
• B)affordable computer and information technology makes it easier to compete.
• C)people need something to do while they wait to return to work for a large corporation.
• D)it is less risky to start a home-based business than other types of entrepreneurial ventures.

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Definitions:

Variable Costing

An accounting method that only assigns variable costs to inventory, considering fixed costs as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a product.

Variable Production Costs

Costs that change in direct proportion to changes in the level of production, such as raw materials and hourly labor.

Fixed Production Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance, ensuring stability in production costs despite output variations.