Generally,how Will Inventory Values Calculated Using Variable Costing Compare to Inventory

question 20

Multiple Choice

Generally,how will inventory values calculated using variable costing compare to inventory values calculated using absorption costing?

• A)Inventory values calculated using variable costing will be equal to inventory values calculated using absorption costing.
• B)Inventory values calculated using variable costing will be less than inventory values calculated using absorption costing.
• C)Inventory values calculated using variable costing will be greater than inventory values calculated using absorption costing.
• D)Inventory values calculated using variable costing will be twice as much as inventory values calculated using absorption costing.

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Definitions:

Actual Price Level

The current index of prices for goods and services, reflecting inflation or deflation in an economy.

Short-run

A period in which at least one input is fixed while others can be varied to change the level of output.

Wage Rates

The standard amount of compensation a worker receives for labor, typically expressed per hour, day, or piece.

Sticky Downward

Describes prices or wages that are resistant to decrease even in conditions where economic theory suggests they should fall, contributing to slow adjustments in markets.