The Following Information Regarding Fixed Production Costs from a Manufacturing

question 62

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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