$\underline {\text { Variable } }$ Expenses Change in Proportion to the Company's Sales Volume

question 47

True/False

$\underline {\text { Variable } }$ expenses change in proportion to the company's sales volume._________________________

---

Definitions:

Absorption Costing

The product cost determination method under this accounting strategy includes the expenses for direct materials, direct labor, and all manufacturing overhead, whether it is variable or fixed.

Gross Margin

A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed manufacturing overhead as an expense of the period.

Period Cost

Expenses that are not directly tied to production activity and are expensed in the period in which they are incurred.