A Small Company Has One Factory and Produces Only One

question 7

Multiple Choice

A small company has one factory and produces only one product,although production fluctuates weekly according to demand.
It has a range of fixed and variable costs.
Which of the following statements about Absorption Costing is Correct?

• A) As there is only one product, absorption costing is unnecessary. The unit cost will always be the same.
• B) Absorption costing is necessary for stock valuation, although unit cost will vary with production.
• C) As there is only one product, absorption costing is unnecessary. The total cost will always be the same.
• D) Absorption costing is necessary for stock valuation, but the unit cost will always be the same.

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Definitions:

Mexicans

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A political party active in the 19th century in the United States, which was opposed to the Democratic Party and supported modernization and economic protectionism.

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Members of the Democratic Party, one of the two major contemporary political parties in the United States, traditionally supporting progressive and liberal policies.

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A state located in the south-central part of the United States, known for its size, cultural history, and economic significance, as well as being the site of significant historical events.