While Using Variable Costing Format of Income Statement,which of the Following

question 110

Multiple Choice

While using Variable Costing format of income statement,which of the following is not included in product costs?

• A) Direct materials.
• B) Direct labour.
• C) Variable manufacturing overhead.
• D) Fixed manufacturing overhead.

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Definitions:

Net Operating Income

The profit generated from a company's ordinary, day-to-day business operations, calculated by subtracting operating expenses from gross profit.

Contribution Approach

A method of income statement presentation where variable costs are deducted from sales to find the contribution margin.

Expected Cost

An estimate of the cost associated with a project or production, taking into account various factors like labor, materials, and overhead.

Sell

To sell involves the exchange of a product or service for money, constituting a basic economic transaction between a provider and a receiver.