Under Absorption Costing

question 24

Multiple Choice

Under absorption costing

• A)only direct variable manufacturing costs are inventoriable.
• B)only direct fixed manufacturing costs are inventoriable.
• C)all manufacturing costs are inventoriable.
• D)no manufacturing costs are inventoriable.

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Definitions:

Amortizing

The process of gradually writing off the initial cost of an asset over a period, especially in the context of loan repayments or in spreading the cost of intangible assets.

Preferred Method

A favored or recommended approach or technique selected among various alternatives for its effectiveness or efficiency.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits.