When Considering Cost as a Percent of Sales, Agent Wholesalers

question 369

True/False

When considering cost as a percent of sales, agent wholesalers are more expensive than manufacturers' sales branches.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold and treats fixed overhead expenses as period costs.

Direct Materials

Raw materials directly used in the manufacturing of a product that can be directly traced to that product.

Variable Overhead

Variable overhead refers to the indirect costs of production that fluctuate with the level of output, such as utilities and materials.

Variable Costing

An accounting method that only includes variable production costs in product costs, excluding fixed costs.