The Relationship of Direct Involvement Between Parties to a Contract

question 34

Multiple Choice

The relationship of direct involvement between parties to a contract is also known as _________.

• A)statutory obligation
• B)association
• C)privity
• D)causal connection

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Definitions:

Variable Costing

An accounting method that includes only variable costs—costs that change with production level—in product costs, excluding fixed manufacturing overhead.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.

Product Costs

Expenses directly tied to the production of goods or services, including materials, labor, and overhead costs.

Period Costs

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.