What Factor Related to Manufacturing Costs Causes the Difference in Net

question 11

Multiple Choice

What factor related to manufacturing costs causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

• A)Absorption costing considers all costs in the determination of net earnings,whereas variable costing considers only direct costs.
• B)Absorption costing "inventories" all direct costs,but variable costing considers direct costs to be period costs.
• C)Absorption costing "inventories" all fixed manufacturing costs for the period in ending finished goods inventory,but variable costing expenses all fixed costs.
• D)Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories,and variable costing considers all fixed costs to be period costs.

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Definitions:

Ethological Theory

A perspective in psychology that emphasizes the genetic and biological bases of behavior, as observed in the natural environment.

Behaviors

The actions or reactions of an organism, often in response to external stimuli, which can be observed and measured externally.

Appetitive Action Patterns

Sequences of behavior that occur in response to signals indicating the availability of a desired goal or reward.

Innate Releasing Mechanisms

Neurological structures that are triggered by specific stimuli, leading to an instinctive behavior in animals.