When Finished Goods Inventories Decrease Over an Operating Period,net Income

question 64

Multiple Choice

When finished goods inventories decrease over an operating period,net income under variable costing ________ net income under absorption costing.

• A) exceeds
• B) is less than
• C) equals
• D) not enough information to determine

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Definitions:

Domestic Consumers

Domestic consumers refer to individuals and households within a country who purchase goods and services for personal use, contributing to the internal demand of the country's economy.

Net Welfare Loss

The loss in social welfare, usually due to inefficiencies in the market system or government intervention policies that lead to misallocation of resources.

Specific Tariff

A fixed fee imposed by a government on imported or exported goods, based on physical units like weight or quantity.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.