Which of the Following Statements Pertain to Both Variable Costing

question 76

Multiple Choice

Which of the following statements pertain to both variable costing and absorption costing?

• A)The income statement discloses the amount of gross margin generated during the reporting period.
• B)Fixed selling and administrative expenses are treated in the same manner as fixed manufacturing overhead.
• C)Fixed selling and administrative expenses are treated in the same manner as variable manufacturing overhead.
• D)Both variable and absorption costing can be used for external financial reporting.
• E)Variable selling costs are treated as period costs.

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Definitions:

Product Recall

The process of retrieving and replacing defective goods for consumers, typically initiated by the manufacturer or distributor when a safety or quality issue is identified.

Reasonable Basis

A legally justified reason for taking a particular action, often used in tax and legal contexts to demonstrate that decisions were made with adequate grounds.

Generalities

Broad statements or concepts that lack specific detail or focus on commonalities across various instances.

Exaggerations

Statements that stretch the truth or facts beyond their actual accuracy.