Which Inventory Costing Method Calculates Operating Income

question 4

Multiple Choice

Which inventory costing method calculates operating income?

• A) Absorption costing
• B) Gross margin costing
• C) Variable costing
• D) Both absorption and variable costing

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Definitions:

Estate for Years

A fixed-term tenancy agreement in real estate that begins and ends on specific dates.

Fee Simple Defeasible

A type of real estate ownership that is conditional and can be voided if certain conditions are not met or specific events occur.

Qualified Fee

A type of estate in land that is subject to certain conditions or limitations, often contrasted with absolute ownership.

Alcoholic Beverages

Drinks containing ethanol, commonly known as alcohol, regulated by law in many parts of the world.