Accountants Prefer the Variable Costing Method Over Absorption Costing Method

question 41

Multiple Choice

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

• A) by using the absorption costing method,income could appear to be higher by producing more inventory.
• B) by using the absorption costing method,income could appear to be lower by producing more inventory.
• C) by using the variable costing method,the cost of goods sold will be higher as more units are manufactured and sales remain the same.
• D) by using the variable costing method,all fixed and variable costs are included in the unit cost of the product manufactured.

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Definitions:

Homozygous

An organism that has two identical alleles for a trait on both homologous chromosomes.

Dihybrid Cross

A genetic cross that takes into account the behavior of alleles of two loci. Compare with monohybrid cross.

Loci

Fixed positions on a chromosome where specific genes or genetic markers are located.

Chromosome Theory

The principle that genes are located on chromosomes, which are the basis for heredity and genetic inheritance.