Assuming That Direct Labor Is a Variable Cost, Product Costs

question 104

Multiple Choice

Assuming that direct labor is a variable cost, product costs under variable costing include only:

• A) direct materials and direct labor.
• B) direct materials, direct labor, and variable manufacturing overhead.
• C) direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative expenses.
• D) direct material, variable manufacturing overhead, and variable selling and administrative expenses.

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Definitions:

Positive Effects

Outcomes or impacts that are beneficial or advantageous to an individual, group, or society.

Average Product

The output per unit of input, calculated by dividing total product by the quantity of input used in its production.

Marginal Product

The additional output generated by employing one more unit of a specific factor of production.

Total Product

The total quantity of output produced by a firm during a given period of time.