Direct Costing Differs from Absorption Costing in That

question 75

Multiple Choice

Direct costing differs from absorption costing in that

• A)under absorption costing all fixed manufacturing overhead is expensed in the current period.
• B)under direct costing all fixed overhead is expensed in the current period.
• C)under direct costing a portion of the fixed manufacturing overhead is included in the finished goods inventory.
• D)under absorption costing an increase in finished goods inventory does not affect the amount of fixed costs expensed.

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Definitions:

Preoperational

A stage in Piaget's theory of cognitive development where children from about 2 to 7 years old begin to engage in symbolic play and have difficulty understanding other viewpoints.

Sensorimotor

A stage in Piaget's theory of cognitive development where infants learn about the world through their movements and sensory impressions.

Concrete Operations

A stage in child development, as per Piaget's theory, where logical thinking develops but is limited to tangible and concrete situations.

Formal Operations

The stage in Piaget's theory of cognitive development where individuals develop the ability to think abstractly, logically, and systematically.