A Model Is Defined as A

question 202

Multiple Choice

A model is defined as a:

• A) description of all variables affecting a situation.
• B) positive analysis of all variables affecting an event.
• C) simplified description of reality to understand and predict an economic event.
• D) prediction based on historical evidence.

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Definitions:

Variable Costing

This is an accounting technique that incorporates only the variable costs of production, including direct materials, direct labor, and variable manufacturing overhead, into the costs of products.

Break-even Sales

The amount of revenue needed to cover total fixed and variable costs, resulting in neither profit nor loss.

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable overhead) in product costs, excluding fixed overhead costs.

Absorption Costing

A ledger keeping approach in accounting that wraps all costs connected to manufacturing—expenses for direct materials, wages for direct labor, and all types of manufacturing overhead, fixed and adjustable—into a product's total cost.