The Primary Difference Between Variable and Absorption Costing Is the Treatment

question 62

Multiple Choice

The primary difference between variable and absorption costing is the treatment of:

• A) fixed selling and administrative costs.
• B) variable selling and administrative costs.
• C) fixed manufacturing overhead.
• D) variable manufacturing overhead.

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Definitions:

Scientific Management

A theory of management that analyzes and synthesizes workflows to improve economic efficiency, especially labor productivity, pioneered by Frederick Taylor.

Scientific Management

A management theory focusing on improving efficiency and labor productivity through scientific studies of tasks.

Frederick W. Taylor

An American mechanical engineer who is considered the father of scientific management, focusing on efficiency improvement through the analysis and optimization of workflow.