Consider the Statements That Follow

question 10

Essay

Consider the statements that follow.
1. Variable selling costs are expensed when incurred.
2. The income statement discloses a company's contribution margin.
3. Fixed manufacturing overhead is attached to each unit produced.
4. Direct labor becomes part of a unit's cost.
5. Sales revenue minus cost of goods sold equals contribution margin.
6. This method must be used for external financial reporting.
7. Fixed selling and administrative expenses are treated in the same manner as fixed manufacturing overhead.
8. This method is sometimes called full costing.
9. This method requires the calculation of a fixed manufacturing cost per unit.
Required:
A. Relate only to absorption costing.
B. Relate only to variable costing.
C. Relate to both absorption costing and variable costing.
D. Relate to neither absorption costing nor variable costing.

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Definitions:

Iconic Memory

A component of the visual memory system which includes a very brief (<1 second) recall of visual items.

Continuous Pattern

A persistent and unbroken sequence or occurrence of something.

Short-term Memory

A cognitive function that temporarily stores and manages information required for immediate tasks and activities.

Anterograde Amnesia

A condition where a person loses the ability to form new memories after the event that caused the amnesia, leaving the capacity for recalling events prior to the event intact.