When Unit Sales Are Constant, but the Number of Units

question 2

Multiple Choice

When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will:

• A) fluctuate in direct proportion to changes in production.
• B) remain constant.
• C) fluctuate inversely with changes in production.
• D) be greater than net operating income under absorption costing.

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Definitions:

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