Which of the Following Types of Costs Is a Product

question 175

Multiple Choice

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

• A) direct materials
• B) direct labor
• C) fixed factory overhead per unit sold
• D) variable selling expense
• E) total administrative expense

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Definitions:

Downward Sloping Demand

A fundamental principle in economics that suggests demand for a product decreases as the price increases, illustrated by a demand curve that slopes downwards from left to right.

Homogeneous Product

A Homogeneous Product is one that is seen as identical or very similar in nature, quality, and performance, regardless of the producer.

Excess Capacity

A situation where a company produces less than the maximum amount it can produce due to lower demand.

Equilibrium

A state where supply equals demand in a market, resulting in an optimal distribution of goods and services.