Assuming That Direct Labor Is a Variable Cost, Product Costs

question 104

Multiple Choice

Assuming that direct labor is a variable cost, product costs under variable costing include only:

• A) direct materials and direct labor.
• B) direct materials, direct labor, and variable manufacturing overhead.
• C) direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative expenses.
• D) direct material, variable manufacturing overhead, and variable selling and administrative expenses.

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Definitions:

Correlation Coefficient

A statistical measure that calculates the strength and direction of the relationship between two variables.

True Score

An individual’s actual score on a variable being measured, as opposed to the score the individual obtained on the measure itself.

Measurement Error

The degree to which a measurement deviates from the true score value.

Measure

A method or tool used for quantifying, assessing, or determining the level, quantity, or capacity of a variable or phenomenon.