Declaring a Dividend Will

question 102

Multiple Choice

Declaring a dividend will:

• A)Increase net income.
• B)Decrease net income.
• C)Not change net income.
• D)Increase the net worth of a company.

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Definitions:

Variable Production Costs

Expenditures that change in direct correlation with production volumes, like direct labor and raw materials used.

Absorption Costing

An accounting method that includes all direct costs and overhead costs related to the production of a specific product.

Product Costs

Expenses directly attributable to the creation of a product, including material, labor, and overhead costs.

Variable Costing

A costing method that only includes variable production costs in product costs, treating fixed manufacturing costs as period expenses.