When Units Manufactured Exceed Units Sold

question 26

Multiple Choice

When units manufactured exceed units sold:

• A) variable costing income equals absorption costing income
• B) variable costing income is less than absorption costing income
• C) variable costing income is greater than absorption costing income
• D) variable costing income is greater by the number of units produced multiplied by the variable cost ratio.

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Definitions:

Loss Averse

A cognitive bias that describes why for individuals the pain of losing is psychologically about twice as powerful as the pleasure of gaining.

Benefits

The positive effects or advantages derived from a particular action, decision, or situation.

Status Quo

The existing state of affairs or the current condition, typically used in the context of social, political, or economic issues.

Avoid Risk

The strategy of minimizing exposure to potential losses or harm by carefully managing decisions and actions.