Use This Information to Answer the Following Question

question 131

Multiple Choice

Use this information to answer the following question.
-The total dollar amount of assets to be classified as investments is

• A)$125,000.
• B)$95,000.
• C)$60,000.
• D)$40,000.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs, both variable and fixed, in the cost of producing each unit of a product.

Variable Costing

An accounting method that only allocates variable costs to the inventory; fixed manufacturing overhead is expensed as incurred.

Cost Structure

The composition of a company's costs, both fixed and variable, that are incurred in the operation of its business.

Variable Costing

An accounting method that only considers variable costs - costs that change with production volume - in calculating the cost of goods sold.