Which of the Following Statements Is

question 23

Multiple Choice

Which of the following statements is

• A) Under variable costing,the income statement is prepared using a contribution margin approach.
• B) Variable costing is not allowed for external financial reporting,but many companies find it useful for internal managerial reports.
• C) Under variable costing,an increase in production increases the amount of profit reported on the income statement,even if the additional units are not sold.
• D) Under variable costing,fixed manufacturing costs are expensed in the period incurred.

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Definitions:

Repay Borrowed

The act of returning money that was borrowed from a person or institution.

Equity Financing

A method of raising capital through the sale of shares in a company, thereby giving investors ownership interests.

Venture

A business enterprise involving risk in expectation of gain.

Co-Owner

An individual or entity that shares ownership of an asset, property, or business with one or more parties.