Which of the Following Best Describes Costs Assigned to the Product

question 140

Multiple Choice

Which of the following best describes costs assigned to the product under the absorption costing method?
Direct labor (DL)
Direct materials (DM)
Variable selling and administrative (VSA)
Variable manufacturing overhead (VOH)
Fixed selling and administrative (FSA)
Fixed manufacturing overhead (FOH)

• A)DL,DM,VSA,and VOH.
• B)DL,DM,and VOH.
• C)DL,DM,VOH,and FOH.
• D)DL and DM.
• E)DL,DM,FSA,and FOH.

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period.

Days' Sales Uncollected

A financial metric that measures the average number of days it takes a company to collect payment after a sale has been made.

Days' Sales In Inventory

A financial metric that estimates how many days it will take to sell the entire inventory, indicating the liquidity of inventory.

Profit Margin

A financial metric that measures the extent to which a company or business activity makes money, expressed as a percentage of revenue.