All of the Following Costs Are Inventoried Under Absorption Costing

question 35

Multiple Choice

All of the following costs are inventoried under absorption costing except:

• A)direct materials.
• B)direct labor.
• C)variable manufacturing overhead.
• D)fixed manufacturing overheaD.
• E)fixed administrative salaries.

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Definitions:

Machine Division

A segment within a manufacturing firm that focuses on the operation and maintenance of machinery.

Return On Investment (ROI)

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the return of the investment by its cost.

Residual Income

The net income that an investment earns beyond the minimum rate of return.

Margin

Generally refers to the difference between the selling price and the cost of a product or service, often expressed as a percentage of the selling price.