Adjustments Would Not Be Necessary If Financial Statements Were Prepared

question 185

Multiple Choice

Adjustments would not be necessary if financial statements were prepared to reflect net income from

• A) monthly operations.
• B) fiscal year operations.
• C) interim operations.
• D) lifetime operations.

---

Definitions:

Variable Manufacturing Overhead

Variable manufacturing overhead refers to the manufacturing costs that vary with the level of production output, such as utilities and certain labor costs.

Variable Cost

Costs that vary directly with the level of production or volume of output.

Fixed Cost

A cost that remains constant regardless of the level of goods or services produced within a certain range.

Break-even Sales

The amount of revenue required to cover a company's total fixed and variable costs.