Throughput Contribution Is Computed as

question 24

Multiple Choice

Throughput contribution is computed as

• A) Sales - variable costs
• B) Sales - cost of direct materials purchased
• C) Number of units sold × (price per unit - material cost per unit)
• D) Sales - period costs

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Definitions:

Periodic Inventory

A method of inventory valuation where inventory is physically counted at specific intervals, typically the end of a fiscal year, to determine the cost of goods sold.

Allowance Method

An accounting technique used to account for bad debts, where estimated uncollectible accounts are matched against revenues in the same accounting period.

Lower of Cost

An accounting principle that values inventory at the lesser of its historical cost or the current market price to prevent overstating the value of assets.

Allowance Method

An accounting method that estimates and records bad debts expense by anticipating which accounts receivable will be uncollectible.