_____ Pay for Every Activity of the Company

question 21

Multiple Choice

_____ pay for every activity of the company.

• A) Revenues
• B) Investments
• C) Retained earnings
• D) Profits
• E) Prices

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Definitions:

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a unit of production, excluding fixed overhead.

Operating Income

Earnings from a company's core business operations, excluding deductions of interest and taxes.

Variable Costing

An accounting method where only variable production costs are charged to product units, excluding fixed overhead costs.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.