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:

Limited Partnership

A business structure involving at least one general partner, who manages the business and is liable for debts, and one or more limited partners, whose liability is capped at their investment.

General Partners

Individuals in a partnership who are responsible for the management of the enterprise and are personally liable for its debts.

Limited Liability

A legal structure that protects individual investors or owners from being personally responsible for the debts and liabilities of a company beyond the amount they have invested.

Joint And Several

A legal term referring to the shared and individual responsibility of two or more parties to fulfill the entirety of an obligation or debt.