Which of the Following Cost(s)are Inventoried When Using Absorption Costing

question 143

Multiple Choice

Which of the following cost(s) are inventoried when using absorption costing?

• A)direct manufacturing costs
• B)variable marketing costs
• C)fixed manufacturing costs
• D)Both A and C are correct.

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Definitions:

Cash Dividends

A portion of a company's earnings distributed to shareholders in the form of cash.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company’s operations is directly reported.

Accounts Receivable

The amount of money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Cash Sales

Transactions where payment is made in cash at the time of the sale, without any credit extended.