Which of the Following Is Not True of the Direct

question 44

Multiple Choice

Which of the following is not true of the direct costing procedure?

• A)Variable selling expenses are deducted from the manufacturing margin.
• B)The cost of goods sold, based solely on variable costs, is subtracted from net sales to arrive at the manufacturing margin.
• C)Variable and fixed costs are considered part of the cost of goods manufactured.
• D)Variable administrative expenses are deducted from the manufacturing margin.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive.