When the Number of Units Produced Is Less Than the Number

question 230

Multiple Choice

When the number of units produced is less than the number of units sold, how does operating income under variable costing differ from operating income under absorption costing?

• A)It is lower than operating income under absorption costing.
• B)It is higher than operating income under absorption costing.
• C)It is the same as operating income under absorption costing.
• D)It depends upon the amount of decline.

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Definitions:

Production Possibilities

Production possibilities depict the different combinations of goods and services that an economy can produce, given its available resources and technology, demonstrating the trade-offs and opportunity costs involved in production choices.

Unemployment Rate

The percentage of people in employment sectors who are unemployed and searching for jobs.

Employment Discrimination

Unfair treatment of employees or job applicants based on race, gender, age, religion, nationality, disability, or other protected characteristics.

Negro League

A league of baseball teams that was active primarily in the United States among African American players when racial segregation prevented them from playing in the major leagues.