Use the Following Information for the Next 3 Questions

question 82

Multiple Choice

Use the following information for the next 3 questions.
Exeter Mfg. Co. introduced a new mass-produced specialty product early in the year. Production and sales of this product for the first four months are as follows: The firm's budgeted fixed overhead is $200,000, and budgeted output is 1,000 units per month. The volume variance, if any, is carried forward month-by-month and closed at the end of the year. When 1,000 units are produced and sold, expected monthly operating income is $40,000.
-In which month(s) was variable costing income higher than absorption costing income?

• A) 4
• B) l, 2, and 3
• C) 2 and 3
• D) 3 and 4

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Definitions:

Reasoning

The mental process of generating conclusions, judgments, or inferences from facts or premises.

System I

Refers to the fast, automatic, and intuitive way of thinking, as opposed to System II's slower, more deliberate thought process.

System II

Often referred to in the context of dual-process theories of reasoning, System II is the analytical and reflective thought process that requires conscious effort.

Unconscious Processing

Mental processes that occur without conscious awareness or intention, influencing perceptions, thoughts, and behaviors.