When Production Is Less Than Sales,the Operating Income Will Be

question 66

Multiple Choice

When production is less than sales,the operating income will be lower under absorption costing than variable costing.Assume zero ending inventories.Which of the following gives the correct reason for the above statement?

• A)all costs incurred have been recorded as expenses
• B)a portion of the fixed manufacturing overhead is still in the ending Finished Goods Inventory account
• C)the units in the beginning finished goods inventory have manufacturing fixed costs assigned to them
• D)fixed manufacturing costs have not been considered while calculating the operating profits

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Definitions:

High Blood Pressure

A condition where the force of blood against artery walls is too high, often leading to health problems such as heart disease.

Rh Incompatibility

A condition where a pregnant woman's blood type is Rh-negative and her unborn baby’s blood type is Rh-positive, potentially leading to health problems in the baby.

Rh-Positive

Refers to the presence of the Rh antigen on the surface of red blood cells, a significant factor in blood transfusion compatibility.

Rh-Negative

Refers to the absence of the Rh factor, a protein on the surface of red blood cells, significant in blood transfusion and pregnancy compatibility situations.