How Will a Favorable Volume Variance Affect Net Income Under

question 143

Multiple Choice

How will a favorable volume variance affect net income under each of the following methods?
Absorption       Variable

• A)reduce no effect
• B)reduce increase
• C)increase no effect
• D)increase reduce

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Definitions:

Fair Value

The sum obtained from disposing of an asset or incurred when transferring a liability in a structured deal with market participants at the time of assessment.

Noncontrolling Interest

A share in the equity of a subsidiary not owned by the parent company, reflecting minority shareholders' interests.

Earnings

The profit a company generates during a specific period, typically reported as net income.

Consolidated Financial Statements

Consolidated financial statements are financial reports that combine the financial operations of a parent company and its subsidiaries into one comprehensive document.