A System of Recording the Receipt and Sale of Each

question 91

Multiple Choice

A system of recording the receipt and sale of each item as it occurs is called a _____.

• A) micro inventory
• B) periodic inventory
• C) just-in-time inventory
• D) perpetual inventory

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Definitions:

Absorption Costing

Accounting method that includes all manufacturing costs (direct costs, variable and fixed overhead) in the cost of a product.

Variable Costing

A method of costing that includes only variable production costs in product costs, treating fixed manufacturing overhead as a period cost to be charged against revenue in the period incurred.

Absorption Costing

A strategy in accounting that involves incorporating costs related to manufacturing, including direct materials, direct labor, and variable and fixed overheads, into the price point of a product.

Production Cost

The total expense incurred in manufacturing a product, including materials, labor, and overhead.