Under Absorption Costing,which of the Following Statements Is Not True

question 134

Multiple Choice

Under absorption costing,which of the following statements is not true?

• A)Over production and inventory buildup can occur because of how managers are evaluated and rewarded.
• B)The fixed costs per unit decline as more units are produced.
• C)Variable inventory costs are treated in the same manner as they are under variable costing.
• D)Fixed inventory costs are treated in the same manner as they are under variable costing.
• E)All manufacturing costs are assigned to products.

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Definitions:

Distribution Network

The interconnected group of storage facilities and transportation systems that a company uses to get products from the manufacturer to the end consumer.

Raw Material

Basic materials that are processed or transformed into components or products in manufacturing and production processes.

Manufacturing Plants

Facilities where goods are produced in large quantities through combining and processing raw materials using various machines and labor.

Supply

The total amount of a product or service available for purchase or consumption by consumers in a market.