You Get Married And, in Doing Some Basic Financial Planning

question 105

Essay

You get married and, in doing some basic financial planning, your spouse suggests that the two of you open separate accounts so that if your total deposits exceed $250,000, your funds will be protected by FDIC.How would you respond to the suggestion?

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Definitions:

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

An accounting method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold, treating fixed manufacturing overhead as an expense of the period in which it is incurred.

LIFO Inventory

A method of inventory valuation that assumes the last items placed in inventory are the first sold (Last In, First Out).

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.