Companies Recognize Fixed Manufacturing Overhead Costs as Period Costs (Expenses)

question 41

Multiple Choice

Companies recognize fixed manufacturing overhead costs as period costs (expenses) when incurred when using

• A) full costing.
• B) absorption costing.
• C) product costing.
• D) variable costing.

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Definitions:

Activity-Based Costing

A cost assignment approach that finds activities in an entity and assigns each activity's expenses to all goods and services based on actual use.

Customer Service

The support and assistance provided by a company to people who buy or use its products or services.

Time-Driven

A model or approach that bases analysis, costing, or scheduling on the amount of time required to perform tasks.

Activity-Based Costing

A technique for allocating costs to products or services based on the resources they consume.