17   What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing? Select one: a. Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs. b. Absorption costing considers all manufacturing costs in the determination of operating income, whereas variable costing considers only prime costs. c. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories, and variable costing considers all fixed manufacturing costs as period costs. d. Absorption costing includes all variable manufacturing costs in product costs, but variable costing considers variable manufacturing costs to be period costs.

A cost that would be included in product costs under both absorption costing and variable costing is:     supervisory salaries.     variable selling expenses.     factory rent.     variable manufacturing costs.

7. Which of the following is the best definition of a variable cost? A. A variable cost is one which is directly traceable to an activity of the business for which the cost will be used. B. A variable cost is one which is associated with goods or services purchased, or produced, for sale to customers. C. A variable cost is one which changes with changes in the level of activity, over a defined period of time. D. A variable cost is one which is spread over a number of activities of the business for which costs are to be determined.