Needs-Tested Spending

question 28

Multiple Choice

Needs-tested spending

• A)decreases in recessions and increases in expansions.
• B)increases in recessions and decreases in expansions.
• C)does not change with the level of economic activity.
• D)is always increasing regardless of whether we are in an expansion or a recession.
• E)cannot be changed unless the government changes the spending laws.

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Definitions:

Absorption Costing

A cost accounting method that includes all manufacturing costs, including both fixed and variable, in the cost of a product.

Contribution Format

A type of income statement layout that separates variable costs from fixed costs, highlighting the contribution margin.

Absorption Costing

A technique in cost accounting that incorporates all costs of production, including fixed and variable, into the valuation of inventory and cost of goods sold.

Variable Costing

An accounting method that includes only variable production costs as product costs, treating fixed manufacturing overhead as an expense of the period in which it is incurred.