Assuming That Direct Labor Is a Variable Cost, the Primary

question 116

Multiple Choice

Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that:

• A) variable costing treats only direct materials and direct labor as product cost while absorption costing treats direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.
• B) variable costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs while absorption costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.
• C) variable costing treats only direct materials, direct labor, the variable portion of manufacturing overhead, and the variable portion of selling and administrative expenses as product cost while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs.
• D) variable costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs.

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Definitions:

Victim

An individual who suffers harm or loss as a result of a crime, accident, or other event or action.

Dire Need

A situation expressing extreme urgency or pressing necessity, often relating to basic survival requirements.

First Aid

Immediate and temporary care given to an individual who is injured or suddenly becomes ill, before professional medical help is available.

Helping Others

Engaging in actions or behaviors that provide support, assistance, or benefit to someone other than oneself.