If Kima Calculates Operating Income Under the Variable Costing Method

question 130

Multiple Choice

If Kima calculates operating income under the variable costing method as opposed to the absorption costing method, operating income will be

• A) $45,000 lower
• B) $270,000 lower
• C) $315,000 higher
• D) $270,000 higher

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Definitions:

Flat Tax

A tax system with a constant marginal rate, usually applied to individual or corporate income.

Federal Reserve Board

The governing body of the Federal Reserve System, which is responsible for setting monetary policy in the United States.

Tools

Devices or implements, often hand-held, used to carry out a particular function or task.

Taxation Systems

The structured methods by which governments finance their expenditure by imposing charges on citizens and corporate entities.