Assuming That the Number of Units Produced Exceeds the Number

question 124

True/False

Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

Recognize the conditions under which a principal can ratify unauthorized acts of an agent.

Learn about the principles governing liability for tortious acts committed by agents.

Understand the special rules concerning agency relationships in real estate transactions.

Grasp the impact of an agent’s actions on the legal status and liability of the principal.

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Definitions:

Gross Margin

The financial metric representing the difference between revenue and the cost of goods sold, divided by revenue, often expressed as a percentage. It indicates how efficiently a company is using its resources to produce goods.

Contribution Margin

Contribution margin is the revenue remaining after deducting variable costs, used to cover fixed costs and profit.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Variable Costing

A pricing approach that incorporates only variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of products.