Which of the Following Is True of Off-The-Shelf Software

question 13

Multiple Choice

Which of the following is true of off-the-shelf software?

• A) It is developed with the intent to sell multiple copies
• B) The company buying the software has no control over the specifications, schedule, or evolution of the software
• C) The company that develops the software is not the intended audience
• D) All of the choices are correct.

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Definitions:

Variable Factory Overhead

Costs that vary with the volume of production and include expenses such as indirect materials and utilities.

Absorption Costing

An accounting method that includes all direct costs and overhead expenses related to the production of a product in its cost base.

Variable Costing Income Statement

A financial statement format that only includes variable costs as product costs, with fixed manufacturing overhead treated as a period expense.

Variable Cost of Goods Sold

Costs that vary directly with the level of production, including raw materials and direct labor expenses.