CC Uses Absorption (Full)costing and Its Direct Competitor,FF Uses

question 2

Multiple Choice

CC uses absorption (full) costing and its direct competitor,FF uses variable costing for internal decision making purposes.Last year,both companies reported the same production and sales volumes.Which is true?

• A)If sales are 10,000 units and production 12,000 units,CC's net income exceeds FF's
• B)If sales are 10,000 units and production 10,000 units,FF's net income exceeds CC's
• C)If sales are 10,000 units and production 8,000 units,FF's net income exceeds CC's
• D)If sales are 12,000 units and production 10,000 units,FF's net income equals CC's
• E)Unable to determine

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Definitions:

Imaginatively

In a manner that shows creativity or inventiveness, especially in solving problems or creating artistic works.

Sufficient

Enough to meet the needs of a situation or a proposed end.

Practical Intelligence

Refers to the ability to solve everyday problems by utilizing knowledge gained from experience in contrast to academic or book knowledge.

Corporate Manager

An individual who is in charge of overseeing the operations and making decisions within a company or organization.