Direct Costing Is Not Truly Synonymous with Variable Costing Since

question 103

True/False

Direct costing is not truly synonymous with variable costing since variable costing does not include all direct costs as inventoriable costs.

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Definitions:

Economic Profits

The surplus gained by a firm when total revenue exceeds total costs, including both explicit and implicit costs, reflecting the financial advantage of a particular course of action.

Accounting Profits

The total revenue of a business minus explicit costs; also known as net income.

Production Costs

The total expenses incurred in the manufacturing or creation of a product or service.

Economic Profit

The difference between total revenue and total costs, including both explicit and opportunity costs, indicating true profitability.