Which of the Following Statements Is True

question 130

Multiple Choice

Which of the following statements is true?

• A)Under variable costing,direct materials and direct labor are expensed as period expenses.
• B)Under variable costing,fixed manufacturing overhead is expensed as period expenses.
• C)Fixed manufacturing overhead costs are treated the same under both absorption costing and variable costing.
• D)Reported income under absorption costing is not affected by production level changes.
• E)Under absorption costing,fixed manufacturing overhead is expensed as period expenses.

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Definitions:

Discount Rate

The interest rate that an eligible depository institution is charged to borrow short-term funds directly from a central bank.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Expected Profit

The anticipated earnings from an investment or business venture after accounting for potential risks and expenses.

Loanable Funds

The total amount of capital available for borrowing, comprised of savings from individuals, businesses, and government, which is available for investment purposes.