Which of the Following Descriptions Would Not Be Found on an Income

question 4

Multiple Choice

Which of the following descriptions would not be found on an income statement prepared using variable costing?

• A) Sales
• B) Fixed costs
• C) Cost of goods sold
• D) Net operating income

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Definitions:

Fixed Cost

Costs that remain constant in total regardless of changes in the level of activity within a relevant range, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Direct Labor

The wages and salaries for those employees directly involved in the manufacturing process of a company's products.