Match the Type of Income Statement to the Costs It

question 47

Multiple Choice

Match the type of income statement to the costs it includes.
-Fixed selling expense

• A)Variable costing income statement
• B)Absorption costing income statement
• C)Both types of income statements

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Definitions:

Overhead Rate

The total of indirect costs of production compared to a base activity measure, like labor hours, used to assign costs to products.

Manufacturing Overhead

These are indirect factory-related costs that are incurred when producing a product, such as utility costs, depreciation, and salaries of supervisors.

Direct Labor-Hours

Direct labor-hours refer to the total hours worked by employees directly involved in the production process.

Traditional Costing

An accounting method that applies indirect costs to products based on a predetermined overhead rate.