Which of the Following Statements Is True for a Company

question 136

Multiple Choice

Which of the following statements is true for a company that uses variable costing?

• A) The unit product cost changes because of changes in the number of units manufactured.
• B) Profit fluctuates with sales.
• C) Any underapplied overhead is included in the product cost.
• D) Product costs include variable administration costs.

---

Definitions:

Amortization Expense

The process of allocating the cost of an intangible asset over its useful life for accounting and tax purposes.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends, accumulated over the company’s life.

Beginning Period

This refers to the starting point or the first date of a financial reporting period.