When Absorption Costing Is Used

question 7

Multiple Choice

When absorption costing is used

• A)for external reporting, variable costing can still be used for internal reporting purposes.
• B)management may be tempted to overproduce in a given period in order to decrease net income.
• C)it facilitates cost-volume-profit analysis.
• D)and production exceeds sales, absorption costing reports a lower net income than variable costing.

---

Definitions:

Perspective

A particular attitude toward or way of regarding something; a point of view.

Formal Operational

The stage in Jean Piaget's theory of cognitive development where individuals develop the ability to think abstractly and logically.

Gender-stereotyped

Presumptions about individual roles and behaviors based on traditional gender roles.

Toy Preferences

Refers to the tendency of individuals, particularly children, to select toys or play items based on interests, gender, cultural norms, or developmental stage.