There Are Two Categories of Variable Costs: ________

question 13

Multiple Choice

There are two categories of variable costs: ________.

• A) Gross costs and net variable costs
• B) Net variable costs and cost of goods sold
• C) Cost of goods sold and other variable costs
• D) Gross variable costs and net costs

Apply the concept of traceable fixed expenses and common fixed expenses in segment analysis.

Calculate segment margin for business segments.

Understand and apply the concept of break-even sales in segment analysis.

Analyze the effects of changes in operational activities on absorption costing net operating income.

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Definitions:

Square Feet

A unit of area measurement equal to a square that is one foot on each side, commonly used in real estate and interior planning.

Indirect Materials

Materials used in the support of the production process that are not easily traced to specific products, essential for maintaining production equipment.

Favorable Variance

A financial term indicating that actual costs were less or actual revenues were more than what was budgeted or forecasted.

Variable Cost

Variable costs vary directly with the level of production output, including expenses like raw materials and direct labor.