Which of the Following Is Not True Concerning the Accounting

question 70

Multiple Choice

Which of the following is not true concerning the accounting for hedges of forecasted transactions using an option?

• A)An intrinsic value must be calculated throughout the hedge period​
• B)​The accounting requires revaluing the market value of the option
• C)​The option fixes the value of the transaction to the date of the commitment.
• D)​All of these statements are true.

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Definitions:

Unit Product Cost

The total cost (both variable and fixed) associated with producing a unit of product, including materials, labor, and overhead.

Variable Costing

Accounting method that considers only variable costs (costs that change with production volume) in the calculation of product cost, excluding fixed costs.

Variable Costing

An accounting approach where only variable production costs (direct materials, direct labor, and variable manufacturing overhead) are included in product costs, with fixed overhead treated as a period expense.

Unit Product Cost

The total cost associated with producing a single unit of product, including direct materials, direct labor, and allocated overhead.