When Calculating the Absorption-Costing Income for External Reporting, All

question 129

Multiple Choice

When calculating the absorption-costing income for external reporting, all

• A)manufacturing costs ultimately become nonmanufacturing costs.
• B)manufacturing costs are product costs and product costs are never expensed.
• C)costs of selling manufactured products are classified as product costs.
• D)selling and administrative costs are classified as nonmanufacturing costs.

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Definitions:

Indirect Methods

Approaches used in accounting and finance to estimate or calculate values based on indirect indicators or conversions, rather than direct measurement.

Three Sources

Refers to the original means or origins of information, funds, or support, often used in various contexts.

Operating

Related to the day-to-day functions and tasks involved in running a business or an organization.

Investing

The act of allocating resources, usually money, with the expectation of generating an income or profit.