When Variable Costing Is Used

question 27

Multiple Choice

When variable costing is used,

• A)all product costs are considered to be variable.
• B)all period costs are considered to be variable.
• C)all product costs are considered to be fixed.
• D)product costs are separated into fixed and variable components.

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Definitions:

Adams' Theory

Refers to Equity Theory developed by J.Stacy Adams, suggesting that employees are motivated when they perceive their treatment at work as fair, especially in relation to others.

Inequity

A lack of fairness or justice within a situation or towards individuals or groups.

McGregor's Theory X/Y

A concept of human motivation within the organizational context, contrasting Theory X (people inherently dislike work) and Theory Y (work is natural and can be a source of satisfaction).

Preferences For Equity

The inclination toward fairness in allocations of rewards or resources among members of a group, based on the principle that contributions and benefits should be proportionate.