When Monthly Production Volume Is Constant and Sales Volume Is

question 32

Multiple Choice

When monthly production volume is constant and sales volume is less than production, income determined with variable costing procedures will

• A) always be greater than income determined using absorption costing.
• B) always be less than income determined using absorption costing.
• C) be equal to income determined using absorption costing.
• D) be equal to contribution margin per unit times units sold.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses from revenues.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation and a claim on part of the corporation's assets and earnings.

Declaration Date

The specific date on which a company's board of directors announces the issuance of a dividend to shareholders.

Common Stock

Represents ownership interests in a corporation, giving holders voting rights and a share in the company's profitability through dividends.