Operating Income Determined Using Absorption Costing Can Be Reconciled to Operating

question 17

Multiple Choice

Operating income determined using absorption costing can be reconciled to operating income determined using variable costing by computing the difference between which of the following?

• A) Fixed manufacturing overhead costs deferred in or released from inventories.
• B) Discretionary costs included in the beginning and ending inventories.
• C) Gross margin (absorption costing method)and contribution margin (variable costing method).
• D) Sales as recorded under the variable costing method and sales as recorded under the absorption costing methoD.

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