When Sales Exceed Production and the Company Uses the LIFO

question 21

Multiple Choice

When sales exceed production and the company uses the LIFO inventory flow assumption, the net operating income reported under variable costing generally will be:

• A) less than net operating income reported under absorption costing.
• B) greater than net operating income reported under absorption costing.
• C) equal to net operating income reported under absorption costing.
• D) higher or lower because no generalization can be made.

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Definitions:

Flexes Knee

The action or movement that decreases the angle between the femur and the lower leg, typically performed by muscles like the hamstrings.

Gracilis

A long, slender muscle located in the inner thigh, involved in hip adduction and knee flexion.

Calcaneus

The large bone forming the heel of the foot, also known as the heel bone.

Achilles Tendon

The tendon connecting the calf muscles to the heel bone, crucial for walking, running, and jumping.