When All of the Units Produced Are Sold,the Operating Income

question 162

Multiple Choice

When all of the units produced are sold,the operating income is the same under both the absorption and variable costing methods.Assume no beginning and ending inventories.Which of the following gives the correct reason for the above statement?

• A) All costs incurred have been recorded as expenses.
• B) A portion of the fixed manufacturing overhead is still in the Finished Goods Inventory account.
• C) All selling and administrative expenses have been recorded as period costs.
• D) Fixed manufacturing costs have not been considered when calculating the operating incomes.

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Definitions:

Leadership Activities

Leadership Activities involve tasks or initiatives undertaken by individuals in leadership positions to guide, motivate, and manage teams or organizations towards achieving goals.

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A structure of social relationships and roles that shapes collective behavior and organization.

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Standardized expectations regarding the level of work performance and productivity accepted and upheld by a group or organization.

Work Effort

The amount of physical or mental energy utilized towards accomplishing a task or objective within a workplace setting.