Variable Costing Income Statements

question 12

Multiple Choice

Variable costing income statements:

• A)Assign direct material and direct labour costs to inventory
• B)Allocate fixed production costs to inventory
• C)Treat variable selling costs as period costs
• D)Assign only direct material costs to inventory

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Definitions:

Storage of Goods

The act of keeping goods in a space designated for their preservation or until they are sold or distributed.

Warranties

Promises or guarantees made by a seller regarding the quality, condition, or performance of a product.

Insurance Contracts

Legal agreements between an insurance company and a policyholder that define the claims which the insurer is legally required to pay.

Avoid Liability

Strategies or actions taken by an individual or entity to minimize or evade legal responsibility and potential damages.