(Appendix 12A)Which of the Following Items Are Included in the Cost

question 76

Multiple Choice

(Appendix 12A) Which of the following items are included in the cost base under the absorption costing approach to cost-plus pricing?

$\begin{array}{l} \quad \quad \quad\text {Variable Cost } \quad \quad \quad \quad \quad\text {Fixed Cost}\\\begin{array}{lll}\text { Production }&\text { Selling }&\text { Production }&\text { Selling }\\\text { A) Yes } & \text { Yes } & \text { Yes } & \text { No } \\\text { B) No } & \text { Yes } & \text { No } & \text { Yes } \\\text { C) Yes } & \text { Yes } & \text { No } & \text { No } \\\text { D) Yes } & \text { No } & \text { Yes } & \text { No }\end{array}\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Cycle Stock

Inventory that is replenished regularly in response to actual customer demand.

Safety Inventory

Additional stock kept on hand to protect against variability in demand or supply.

Warehouse Inventory

The list of goods and materials held in a warehouse that are available for sale or production needs.

Pipeline Inventory

Inventory that is in transit or in the process of being transported between the supplier and the buyer, often considered part of the overall inventory on order but not yet available for use or sale.