Vector Corporation Has Been Using an Incorrect Method in Accounting

question 21

True/False

Vector Corporation has been using an incorrect method in accounting for supplies expense.It can change to the correct method without filing 3115.

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Definitions:

Variable Costing

A costing method in which all variable manufacturing costs are included as inventory costs, while fixed manufacturing overhead is treated as an expense in the period incurred.

External Reporting

External reporting involves the preparation and presentation of financial statements and other reports by a company to provide financial and operational information to external stakeholders, such as investors, creditors, and regulatory agencies.

Absorption Costing

An accounting method that includes all manufacturing costs in the cost of a product.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.