A Major Conceptual Difference Between Throughput Costing and Variable Costing

question 6

Multiple Choice

A major conceptual difference between throughput costing and variable costing is

• A)under variable costing, direct labour and variable manufacturing overhead are charged to income as period expenses.
• B)under throughput costing, direct labour and variable manufacturing overhead are deferred in inventory rather than charged to income as period expenses.
• C)under throughput costing, direct labour and variable manufacturing overhead are charged to income as period expenses.
• D)there are no conceptual differences between the two methods.

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Definitions:

Product Requirements

Specifications and criteria that outline the features, functionality, and qualities a product must possess to meet stakeholders' needs.

Control Chart

A tool used in statistical quality control to monitor and control a process by plotting the performance of the process over time and identifying any signs of process variation.

Shewhart

Walter A. Shewhart, known for his work in statistical process control and the development of the control chart.

Planning Process

A systematic approach to setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions.