If Inventory Has Not Increased or Decreased, but Has Stayed

question 45

True/False

If inventory has not increased or decreased, but has stayed the same, operating income will be the same under variable costing and absorption costing.

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Definitions:

Controllable Margin

Controllable Margin refers to the portion of profit or income that can be directly influenced by managerial decisions, excluding fixed costs and uncontrollable factors.

Investment Center

A division or unit within an organization that has control over its revenue, expenses, and invested capital, and is responsible for its profit and investment decisions.

Budgeted Selling Expenses

Estimated costs related to the sale of a company's products or services, planned for a future period.

Flexible Budget

A budget which is responsive and adjusts based on fluctuations in levels of volume or activity.