Question

A manufacturing company gross margin income statement refers to sales revenue minus:

variable costs, excluding variable marketing and administrative costs.

all variable costs, including variable marketing and administrative costs.

cost of goods sold, excluding fixed indirect manufacturing costs.

cost of goods sold, including fixed indirect manufacturing costs.

Fixed costs are different than variable costs because (CMA adapted)

Total variable costs are variable over the relevant range but fixed in the long-term, while fixed costs never change.

Unit variable costs fluctuate and unit fixed costs remain constant.

Total variable costs are constant over the relevant range, while fixed costs change in the long-term.

Unit variable costs are fixed over the relevant range and unit fixed costs are variable.

Answer 1

• Answer #1
  Correct Answer = Option #4: A manufacturing company gross margin income statement refers to sales revenue minus “cost of goods sold, including fixed indirect manufacturing costs.”
  Gross margin = Sales revenue – Cost of Goods Sold
• Answer #2
  Correct Answer = Option #4:
  “Unit variable costs are fixed over the relevant range and unit fixed costs are variable”
  This is because:
  >Variable cost stays same ‘per unit’ and changes in totality.
  >Fixed Cost stays same in totality and changes ‘per unit’
  

answered by: anonymous