Refer to the Exhibit

question 63

Multiple Choice

Refer to the exhibit. What does the script configure?

Definitions:

Variable Costing

An accounting method that only allocates variable costs to the inventory; fixed manufacturing overhead is expensed as incurred.

Cost Structure

The composition of a company's costs, both fixed and variable, that are incurred in the operation of its business.

Variable Costing

An accounting method that only considers variable costs - costs that change with production volume - in calculating the cost of goods sold.

Direct Materials Costs

The expenses for raw materials that are directly used in the manufacturing of a product.