Which of the Following Statements Is True of Absorption Costing

question 122

Multiple Choice

Which of the following statements is true of absorption costing?

• A) Absorption costing allocates fixed manufacturing overhead to actual units produced during the period.
• B) Absorption costing carries over nonmanufacturing costs to the future periods.
• C) Absorption costing shows the same level of profit as variable costing irrespective of the level of inventories.
• D) Absorption costing allocates total manufacturing cost using the budgeted level of production for a particular year.

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Definitions:

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Physical Deterioration

The gradual decline in the physical condition and functionality of the human body as a result of aging or disease.