Philpott's Operating Income Using Absorption Costing Is $100

question 86

Multiple Choice

Philpott's operating income using absorption costing is $100. Its inventories using both absorption and variable costing are as follows: Under variable costing, operating income would be:

• A) $102
• B) $94
• C) $100
• D) $96

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Definitions:

Liability Clause

A provision in a contract that outlines the responsibilities and liabilities of each party involved in the agreement.

Agent's Clause

A provision in a contract specifying the authority and scope of the relationship between an agent and the principal they represent.

Apparent Authority

The appearance or assumption of authority based on the actions or statements of a principal, leading others to believe a person has the right to act on the principal’s behalf.

Undisclosed Principal

A legal term referring to a situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.