If the Number of Units Sold Exceeds the Number of Units

question 14

Multiple Choice

If the number of units sold exceeds the number of units produced,how is operating income affected?

• A)Operating income would be the same under both a variable costing and absorption costing income statement.
• B)Operating income would be lower under a variable costing income statement.
• C)Operating income would be higher under an absorption costing income statement.
• D)Operating income would be higher under a variable costing income statement.

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Definitions:

Triple Bottom Line

A framework or theory that recommends companies commit to focus on social and environmental concerns just as they do on profits, encapsulating three Ps: profit, people, and planet.

Corporate Form

A legal structure for organizing a business as a separate legal entity, which can own property, enter into contracts, sue and be sued, distinct from its owners (shareholders).

Sole Proprietorships

Sole proprietorships are businesses owned and operated by one person, where there is no legal distinction between the owner and the business entity.

Business Organization

A legal entity formed to carry out commercial or industrial enterprises by engaging in trading, manufacturing, or providing services.