Which of the Following Statements Is True of Variable Costing

question 116

Multiple Choice

Which of the following statements is true of variable costing?

• A) It considers variable manufacturing overhead as period costs.
• B) It considers fixed manufacturing overhead as product costs.
• C) It considers variable selling and administrative costs as product costs.
• D) It considers fixed selling and administrative costs as period costs.

---

Definitions:

Profits

The financial gain realized when the revenue from selling goods or services exceeds the costs of production.

Monopolized

Refers to a market structure where a single firm or entity controls a significant portion of the market share, reducing competition.

Consumer Surplus

Consumer Surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Net Social Gain

The overall benefit to society, calculated by subtracting total social costs from total social benefits.