When Reconciling Variable Costing and Absorption Costing Net Operating Income

question 222

True/False

When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be deducted from variable costing net operating income to arrive at the absorption costing net operating income.

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Definitions:

Roofing Fees Revenue

This refers to the income generated from providing roofing services.

Accounts Receivable

Outstanding payments due to a business from its clients for goods or services already delivered but not yet settled.

Unearned Revenues

Funds paid to a business for products or services that are to be supplied or carried out in the future.