The Level of Inventory of a Manufactured Product Has Increased

question 31

Multiple Choice

The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available: What would be the effect on income from operations if variable costing is used rather than absorption costing?

• A) $80,000 decrease
• B) $80,000 increase
• C) $104,000 decrease
• D) $104,000 increase

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Definitions:

Details

Specific or minor pieces of information that collectively form a comprehensive picture of a situation, object, or plan.

Generic Competitive Strategies

Framework described by Michael Porter that outlines three potential strategies for achieving competitive advantage: cost leadership, differentiation, and focus.

Competitive Environment

The dynamic external system in which businesses compete with each other for customers, resources, and market share.

Competitive Strategy

A long-term plan developed by a company to gain a competitive advantage over its rivals in the industry.