S&P Enterprises Sold 10,000 Units of Inventory During a Given

question 117

Multiple Choice

S&P Enterprises sold 10,000 units of inventory during a given period.  The level of inventory of the manufactured product remained unchanged. The manufacturing costs were as follows: Which of the following statements is true?

• A) Net income will be the same under both variable and absorption costing.
• B) Net income under variable costing will be $45,000 less than net income under absorption costing.
• C) Net income under absorption costing will be $40,000 more than under variable costing.
• D) The difference in net income cannot be determined.

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Definitions:

Bounded Rationality

The concept that decision-making is limited by the information available, cognitive limitations of the mind, and the finite amount of time available to make a decision.

Organizational Settings

The physical and social environment in which organizational activities occur, including structures, culture, and processes.

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Alone

The state of being by oneself, not accompanied by or in conjunction with others.