Use the Information Below to Answer the Following Question(s)

question 152

Multiple Choice

Use the information below to answer the following question(s) .Urban Body Products Ltd.manufactures body wash liquid soap.The controller has provided the following information and stated that standard costing is used for manufacturing, marketing, and administrative costs. There were no beginning or ending inventories of materials or work-in-process.
-When the distinction between variable and fixed costs is one of the important elements in the preparation of the income statement, the method used should be the

• A)capitalization method.
• B)contribution margin method.
• C)gross margin method.
• D)inventoriable method.
• E)absorption method.

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Definitions:

Imposed Nonexchange Revenues

Revenues collected by the government through taxes, fines, and other charges not in exchange for specific goods or services.

Government Mandated

Requirements or actions imposed by a government body that organizations or citizens must follow.

Voluntary Nonexchange Transactions

Transactions where an entity voluntarily gives or receives value without directly receiving or giving equal value in exchange.

Fund

A pool of money set aside for a specific purpose or managed to generate financial returns.