Increase in Ice Cream Consumption During the Summer Months Is

question 24

Multiple Choice

Increase in ice cream consumption during the summer months is an example of ______.

• A)predictable variations
• B)random variations
• C)irregular variations
• D)abnormal variations

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Definitions:

Finished Goods

Completed products ready for sale or shipment to customers, found as an inventory category in the balance sheet.

Fixed Overhead

Refers to the total of all indirect costs that remain constant regardless of the level of production or business activity.

Absorption Costing

Absorption Costing is an accounting method that includes all of the manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Variable Overhead

Costs that fluctuate with production volume, such as utilities or materials used in production.