If the Number of Units Produced in a Period Is

question 165

True/False

If the number of units produced in a period is smaller than the number of units sold in period, absorption costing income will be higher than variable costing income.

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Definitions:

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, or insurance premiums.

Output

The total amount of goods or services produced by a company, industry, or economy within a particular period.

Diminishing Marginal Returns

A rule indicating that when increasing amounts of a variable input are introduced to a constant input, the output gained from each subsequent unit of input will ultimately diminish.