The Following Information Regarding Fixed Production Costs from a Manufacturing

question 116

Multiple Choice

The following information regarding fixed production costs from a manufacturing firm is available for the current year: Which of the following statements is not true?

• A)The maximum amount of fixed production costs that this firm could deduct using absorption costs in the current year is $116,000.
• B)The maximum difference between this firm's the current year income based on absorption costing and its income based on variable costing is $16,000.
• C)Using variable costing,this firm will deduct no more than $16,000 for fixed production costs.
• D)If this firm produced substantially more units than it sold in the current year,variable costing will probably yield a lower income than absorption costing.

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Definitions:

Decision-making Approach

A systematic process for making choices among various alternatives, often involving steps such as identifying a problem, generating options, and selecting a course of action.

Fairness

The quality of treating people equally or in a way that is right and just.

Justice

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Greater Good

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