Which Accounting Policy for Manufacturing Fixed Costs Is Likely to Favour

question 60

Multiple Choice

Which accounting policy for manufacturing fixed costs is likely to favour managers whose firms are subject to political scrutiny?

• A) direct costing
• B) absorption costing
• C) LIFO assuming prices are falling
• D) FIFO assuming prices are rising

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Definitions:

Excess Reserves

The amount of reserves that a bank holds beyond the minimum required by regulation or central bank policy.

Decrease Deposits

A reduction in the amount of funds deposited in banks or financial institutions, often indicating a shift in savings or investment strategies.

Excess Reserves

The reserves that banks hold over and above the legal requirement set by the central bank, available to lend or invest.

Income-producing Assets

Assets that generate revenue over time, such as rental properties, stocks, or bonds.