Differences in Performance Among Firms Are Mostly Explained By

question 4

Multiple Choice

Differences in performance among firms are mostly explained by:

• A) The industries in which they participate
• B) Whether or not they have access to low cost capital
• C) Differences in what companies do, what they fail to do and how they operate
• D) Whether they are publicly held and subject to financial market scrutiny or privately held

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Definitions:

Variable Costing

A technique in managerial accounting where only variable production costs are charged to product units, differentiating it from absorption costing by not including fixed overhead.

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.