__________ Materials Are Any Commodity or Service That Is Not

question 58

Multiple Choice

__________ materials are any commodity or service that is not directly involved in the production of finished goods.

• A) Raw
• B) Custom
• C) Finished
• D) Direct
• E) Indirect

---

Definitions:

Variable Costing Income Statement

An income statement format that deducts only variable costs from sales to compute contribution margin, followed by the deduction of fixed costs to determine net income.

Net Operating Income

The profit generated from the normal operational activities of a business, excluding other income and expenses such as interest and taxes.

Variable Costing

An accounting technique that calculates the cost of a product by considering only costs that fluctuate with the level of production, excluding fixed costs.

Absorption Costing

A costing method that includes all manufacturing costs - both variable and fixed - in the cost of a product.