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Which of the Following Statements Are Correct

question 29

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Which of the following statements are correct?


Definitions:

Variable Costing

An accounting method in which costs vary in proportion to the volume of output; this includes direct materials, direct labor, and variable manufacturing overhead.

Operating Income

The profit realized from a business's core operations, excluding expenses related to financing and investments.

Absorption Costing

An accounting method that includes all manufacturing costs (direct and indirect) in the cost of a product.

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold.

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