The ________ Method Allows Managers to Increase Operating Income Through

question 279

Multiple Choice

The ________ method allows managers to increase operating income through production by producing more products than needed.

• A) absorption costing
• B) variable costing
• C) direct costing
• D) marginal costing

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Definitions:

Average Rate of Return Method

A technique used in capital budgeting to estimate the profitability of potential investments.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Time Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Present Value Amount

The current value of a future sum of money or stream of cash flows, given a specified rate of return.