A Company That Uses Standard Costing Wishes to Reconcile the Difference

question 31

Multiple Choice

A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing. Which TWO of the following will NOT help with this reconciliation? (Choose two.)

• A) The actual fixed production overheads.
• B) The closing inventory.
• C) The opening inventory.
• D) The under or over absorbed fixed production overheads.
• E) The fixed production overhead absorption rate.

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Definitions:

Dependent Variable

In an experiment or statistical model, the variable that is expected to change as a result of manipulations in the independent variable.

Independent Variable

A factor in a study or simulation that is deliberately altered to see its impact on a variable that depends on it.

Total Sum Of Squares

A measure in statistics that quantifies the total variation of a dataset.

Dependent Variable

The variable in an experiment that is expected to change in response to changes in the independent variable.