Net Income Does Not Change as a Result of Using

question 13

True/False

Net income does not change as a result of using the single-step format over the multistep format.

---

Definitions:

Prime Cost

The combined costs of raw materials and direct labor involved in the production of a product.

Manufacturing Overhead

Refers to all the indirect costs associated with the production process, such as utilities, maintenance, and salaries of supervisors that are not directly tied to the creation of a product.

Administrative Costs

Expenses related to the general operation of a business, including salaries of executive staff, office supplies, and utilities.

Indirect Costs

Costs that are not directly assignable to a specific product or project, such as rent, utilities, and managerial salaries.