In Using the Variable Cost Concept of Applying the Cost-Plus

question 162

True/False

In using the variable cost concept of applying the cost-plus approach to product pricing, fixed manufacturing costs and both fixed and variable selling and administrative expenses must be covered by the markup.

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Definitions:

Ledger

A book or other collection of financial accounts of a particular type or for a specific purpose in accounting.

Journal

A formal record where all financial transactions of a business are initially recorded, date-wise, before being posted to the general ledger.

Trial Balance

A statement that lists all the balances of the general ledger accounts of a business at a particular time to check the correctness of double-entry bookkeeping.

Ledger Balance

The total balance of all accounts in a ledger at a particular point in time, reflecting the current financial position.