Chu Enterprise's Inventory Increased During the Year

question 33

Multiple Choice

Chu Enterprise's inventory increased during the year. On the basis of this information, income reported under absorption costing:

• A) will be the same as that reported under variable costing.
• B) will be higher than that reported under variable costing.
• C) will be lower than that reported under variable costing.
• D) will differ from that reported under variable costing, the direction of which cannot be determined from the information given.
• E) will be less than that reported in the previous period.

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Definitions:

FCFS

First-Come, First-Served, a scheduling policy that serves clients or processes in the order they arrive.

Sequencing

Determining the order in which jobs should be done at each work center.

Jobs

Tasks or pieces of work, especially those that are paid.

Work Centres

Specific locations within a production facility where particular processes or operations are carried out.