Operating Income Reported Under Absorption Costing Will Generally Exceed Operating

question 63

Multiple Choice

Operating income reported under absorption costing will generally exceed operating income reported under variable costing for a given period in which of the following cases?

• A) If production equals sales for that period.
• B) If production exceeds sales for that period.
• C) If sales exceed production for that period.
• D) If the variable manufacturing overhead exceeds the fixed manufacturing overhead.

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Definitions:

Extensor Retinaculum

A fibrous band that binds the tendons of the extensor muscles of the wrist and ankle, preventing them from bowing during muscle contraction.

Flexor Retinaculum

A fibrous band of tissue that holds the tendons of the flexor muscles of the forearm near the wrist, preventing them from bowing outward.

Extensor Aponeurosis

A tough, fibrous tissue that connects the extensor muscles in the hand or foot to the bone, helping to extend the digits.

Pronator Quadratus

A square-shaped muscle on the distal forearm that helps in pronating the forearm.