When Reconciling from Variable Costing Income to Absorption Costing Income

question 106

Multiple Choice

When reconciling from variable costing income to absorption costing income, if production exceeded sales and LIFO is used, then the

• A) Fixed overhead in the beginning inventory is added
• B) Fixed overhead in the beginning inventory is deducted
• C) Fixed overhead in the ending inventory is added
• D) Fixed overhead in the ending inventory is ignored

---

Definitions:

Chi-square Distribution

The Chi-square distribution is a probability distribution used in statistical significance tests, particularly suitable for categorical data.

Normal Distribution

A bell-shaped distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

F-distribution

A probability distribution that arises in the analysis of variance (ANOVA), used to compare variances and determine statistical significance.

T-distribution

A probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small and the population variance is unknown.