Managerial Decision Making: Absorption vs. Variable Costing

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is variable costing?

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1. What is absorption costing?

2. What is markup?

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About This Quiz & Worksheet

This quiz/worksheet was constructed with the aim to help you measure your understanding of absorption costing, variable costing, and related terms, with questions testing both fundamental and applicable comprehension.

Quiz & Worksheet Goals

This quiz/worksheet includes questions on the definitions and use of:

  • Variable cost
  • Fixed cost
  • Markups

Skills Practiced

  • Distinguishing differences - compare and contrast variable and absorption costing
  • Defining key concepts - ensure that you can accurately define markup and fixed cost
  • Knowledge application - use your knowledge to answer a question about the kind of pricing to use given a certain variable and fixed cost

Additional Learning

To learn more about these methods of pricing, look over the accompanying lesson titled Managerial Decision Making: Absorption vs. Variable Costing. This lesson comes with the following objectives:

  • Understand the considerations that go into setting prices
  • Learn about variable costing through a provided example
  • Examine absorption costing in action within a given example
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