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Questions and Answers
What is the primary difference between absorption costing and variable costing?
What is the primary difference between absorption costing and variable costing?
- Absorption costing classifies expenses by function, while variable costing categorizes expenses by behavior and then may further classify them by function. (correct)
- Absorption costing categorizes expenses first by behavior and then may further classify them by function, while variable costing classifies expenses by function.
- Absorption costing does not classify expenses, while variable costing categorizes expenses by behavior and function.
- Absorption costing and variable costing both categorize expenses only by function.
What does PCM represent in the context of the given text?
What does PCM represent in the context of the given text?
- Product Contribution Margin (correct)
- Period Costing Method
- Total Contribution Method
- Variable Nonmanufacturing Period Expenses
In the formula VNME = TCM - PCM, what does TCM stand for?
In the formula VNME = TCM - PCM, what does TCM stand for?
- Total Cost of Goods Sold
- Total Contribution Method (correct)
- Product Contribution Margin
- Variable Nonmanufacturing Period Expenses
