Which of the Following Statements Is True Regarding Variable Costing

question 5

Multiple Choice

Which of the following statements is true regarding variable costing?

• A)It is a traditional costing approach.
• B)Only manufacturing costs that change in total with changes in production level are included in product costs.
• C)It is not permitted to be used for managerial reporting.
• D)It treats overhead in the same manner as absorption costing.
• E)It makes it easier to manipulate earnings with changes in production levels.

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Definitions:

Personally Liable

The state of being legally responsible for a debt or obligation in a personal capacity, not as a corporation or other entity.

Corporate Shares

Units of ownership in a corporation, representing a portion of the corporation's capital.

Approval Of Stockholders

The formal consent given by shareholders, typically through voting, to authorize corporate actions or decisions.

Corporate Income

Income earned by a corporation through its business activities, subject to corporate income tax.