Which of the Following Statements Is Correct

question 21

Multiple Choice

Which of the following statements is correct?

• A)Total fixed costs are equal to revenue plus variable cost per unit times the quantity produced.
• B)Profit is equal to total fixed costs plus revenue.
• C)Total fixed costs are equal to profit minus revenue.
• D)Profit is equal to revenue minus total variable costs minus total fixed costs.

---

Definitions:

Overapplied Overhead

Occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Cost of Goods Sold

The immediate expenses related to the manufacturing of products that a company sells.

Work in Process Inventory

Work in process inventory includes goods partially completed in the production process, sitting between raw materials and finished goods.

Predetermined Overhead Rate

An estimated overhead rate used to allocate manufacturing overhead costs to products.