Contracts in Restraint of Trade Are Regarded as Prima Facie

question 18

True/False

Contracts in restraint of trade are regarded as prima facie void.

Identify which costs are included in the cost of products manufactured under the absorption costing concept.

Distinguish between variable and absorption costing in the treatment of fixed and variable costs.

Recognize how variable and absorption costing impact the income statement presentation, specifically gross profit, contribution margin, and net profit.

Understand the application of variable and absorption costing in determining the cost of goods sold.

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Definitions:

Average Cost Method

An inventory costing method that determines the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Gross Profit

calculates as the difference between revenue and the cost of goods sold, indicating how efficiently a company uses its resources to produce goods.

Ending Inventory

The total value of all inventory, including goods in various stages of production, available at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller bears transportation costs and risk until the goods reach the buyer's location.