Under Absorption Costing,fixed Manufacturing Overhead Costs Appear on Two Places

question 20

Multiple Choice

Under absorption costing,fixed manufacturing overhead costs appear on two places on the income statement that include ________ and ________.

• A) usage variance for fixed overhead costs; cost of goods sold
• B) production volume variance; cost of goods sold
• C) efficiency variance for fixed overhead costs; production volume variance
• D) efficiency variance for fixed overhead costs; cost of goods sold

---

Definitions:

Creditor

An entity or person that lends money or extends credit to another party, expecting repayment in the future.

Deposit Agreement

A contract between a customer and a bank setting forth terms and conditions for deposit accounts.

Good Faith

An honest intent to act without taking an unfair advantage over another party, often highlighted in contracts and negotiations.

Ordinary Care

The level of diligence and caution that an average person exercises and is expected to exercise in a specific situation.