Which Statement Is Correct About Overhead

question 21

Multiple Choice

Which statement is correct about overhead?

• A)Fixed overhead is capitalized under absorption costing.
• B)Fixed overhead is capitalized under variable costing.
• C)Variable overhead is always expensed.
• D)Selling costs are part of fixed overhead.

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Definitions:

Double Derivative Suit

A legal action brought by a shareholder on behalf of a parent company against a subsidiary for harm done to the parent company.

Derivative Action

A lawsuit brought by a corporation's shareholder on behalf of the corporation against a third party, often its executives or directors, for misconduct.

Shareholder

A person or entity that owns stocks or shares in a company, entitling them to a portion of the firm's profits and assets.

Liquidation Rights

The rights of a corporation's shareholders to a proportional share of the assets if the company is dissolved, after debts and obligations have been paid.