Kern Corporation Produces a Single Product

question 131

Multiple Choice

Kern Corporation produces a single product. Selected information concerning the operations of the company follow:
Assume that direct labor is a variable cost.
-Which costing method,absorption or variable costing,would show a higher operating income for the year and by what amount?

• A) Absorption costing net operating income would be higher than variable costing net operating income by $2,500.
• B) Variable costing net operating income would be higher than absorption costing net operating income by $2,500.
• C) Absorption costing net operating income would be higher than variable costing net operating income by $5,500.
• D) Variable costing net operating income would be higher than absorption costing net operating income by $5,500.

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Definitions:

Psychosocial Development

A theory by Erik Erikson that emphasizes the impact of social experiences across the lifespan on individual development.

Sense Of Initiative

An individual’s ability to plan and execute tasks independently, often associated with confidence in taking actions.

Initiative Versus Guilt

A stage in Erik Erikson's psychosocial development theory, where children learn to initiate activities and interact with others or experience guilt for their actions and thoughts.

Pursue Interests

To pursue interests means to actively follow or engage in activities or subjects that one finds enjoyable or valuable.