During the Last Year,Moore Company's Total Variable Production Costs Were

question 51

Multiple Choice

During the last year,Moore Company's total variable production costs were $10,000,and its total fixed manufacturing overhead costs were $6,800.The company produced 5,000 units during the year and sold 4,600 units.There were no units in the beginning inventory.Which of the following statements is true?

• A) The operating income under absorption costing for the year will be $800 higher than operating income under variable costing.
• B) The operating income under absorption costing for the year will be $544 higher than operating income under variable costing.
• C) The operating income under absorption costing for the year will be $544 lower than operating income under variable costing.
• D) The operating income under absorption costing for the year will be $800 lower than operating income under variable costing.

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Definitions:

Economic Conditions

The state of the economy at a certain time, including factors like inflation, employment rates, and GDP growth.

Accounts Receivable Period

The mean duration that a company takes to collect payments from its customers for products or services provided on credit.

Cash Collection Period

The average period of time between when a sale is made on credit and when the payment is received.

Bank Deposit

Funds placed into a banking institution for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.