Under Variable Costing, the Fixed Manufacturing Overhead Costs Are Classified

question 79

True/False

Under variable costing, the fixed manufacturing overhead costs are classified as period costs and are expensed in the period in which they are incurred.

---

Definitions:

Earnings Rate

The return on an investment or project expressed as a percentage of the cost, often used to measure profitability.

Present Value Factor

A multiplier used to determine the present value of a future cash flow, taking into account a specific discount rate.

Annuity

An investment vehicle providing a constant flow of payments to the owner, usually utilised as a source of income for retired people.

Net Cash Flow

The variance between the cash coming into and going out of a business within a set timeframe.