When Production Exceeds Sales

question 20

Multiple Choice

When production exceeds sales

• A)ending inventory under variable costing will exceed ending inventory under absorption costing.
• B)ending inventory under absorption costing will exceed ending inventory under variable costing.
• C)ending inventory under absorption costing will be equal to ending inventory under variable costing.
• D)ending inventory under absorption costing may either exceed, be equal to, or be less than ending inventory under variable costing.

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Definitions:

Maximum Extent

The greatest possible degree or limit to which something can be extended or enlarged.

Utilitarianism

A moral philosophy that bases the rightness or wrongness of actions on their consequences, especially their ability to bring about the greatest happiness for the greatest number of people.

Intentions

The plans or desires that one has in mind to carry out an action.

Consequentialists

Ethical theorists who believe that the morality of an action is determined solely by its consequences.