A Decrease in Inventory Levels Will Cause Which of the Following

question 114

Multiple Choice

A decrease in inventory levels will cause which of the following when comparing net profit under absorption and variable costing?

• A)A lower net profit under variable costing
• B)A lower cost of sales and a higher net profit under absorption costing
• C)The same net profit under both variable costing and absorption costing
• D)A higher net profit under variable costing

---

Definitions:

Bruise

An injury to the skin causing discoloration and swelling without breaking the surface.

Contusion

A bruise resulting from a blunt impact, causing bleeding under the skin without breaking the skin's surface.

Rule of Nines

A method used in the assessment of burns, dividing the body into sections of 9% (or multiples thereof) to estimate the total area affected.

Sunburn

Damage to the skin resulting from excessive exposure to ultraviolet (UV) radiation, usually from the sun, causing redness, pain, and sometimes blistering.