Kern Corporation Produces a Single Product

question 215

Multiple Choice

Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Assume that direct labor is a variable cost.
Which costing method, absorption or variable costing, would show a higher operating income for the year and by what amount?

• A) Absorption costing net operating income would be higher than variable costing net operating income by $2,500.
• B) Variable costing net operating income would be higher than absorption costing net operating income by $2,500.
• C) Absorption costing net operating income would be higher than variable costing net operating income by $5,500.
• D) Variable costing net operating income would be higher than absorption costing net operating income by $5,500.

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Definitions:

Indigenous Canadians

The First Nations, Inuit, and Métis peoples of Canada, each with their own distinct heritage, language, cultural practices, and political systems.

Life Expectancy

The average period that a person may expect to live, which can vary greatly depending on factors such as geographical location, genetics, lifestyle, and access to healthcare.

Non-Indigenous

Referring to individuals or groups that are not native or original to a certain region, often used in the context of people living in lands historically inhabited by indigenous populations.

Rehabilitation Centre

A facility designed to aid in the recovery and therapy of individuals who have suffered from illnesses, injuries, or addictions, helping them regain skills or develop new ones for daily living.