Adam Smith

question 112

Multiple Choice

Adam Smith:

• A)was one of the first scholars to write about the principle of comparative advantage
• B)wrote in the 18th century about the benefits available from trade
• C)inspired David Ricardo
• D)all of the above are true

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Definitions:

Variable Costing

An accounting method that only includes variable costs, such as materials and labor, in the cost of goods sold and excludes fixed overhead costs.

Direct Costing

A method in managerial accounting that includes variable costs directly attributable to the production of a product in the cost of goods sold, excluding fixed costs.

Full Costing

An accounting method that includes all direct and indirect costs in the price of a product or service.

Carrying Cost

The total costs associated with holding inventory or assets, including storage, insurance, and taxes.