Which of the Following Is True When Units Produced Exceed

question 9

Multiple Choice

Which of the following is true when units produced exceed units sold?

• A)Full costing and variable costing will yield the same net income.
• B)Full costing assigns a portion of the fixed manufacturing costs to the units in ending inventory.
• C)Net income will be higher under variable costing than under full costing.
• D)Inventory levels will decrease.

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Definitions:

Profit-maximizing

The process of identifying the output level at which a business can achieve the highest possible profit.

Cost Data

Information related to the expenses incurred in the production, operation, or provision of services, used for analysis and decision-making purposes.

Demand Data

Information on the quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.

Profit-maximizing

The approach a corporation takes to ascertain the price and quantity of output that yields the maximum profit.