When There Are No Units in the Beginning Finished Goods

question 101

True/False

When there are no units in the beginning finished goods inventory and the units produced are more than the units sold,the operating income will be higher under absorption costing than variable costing.

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Definitions:

Financing Statement

A document filed to give public notice of a security interest in personal property, securing payment or performance of an obligation.

Ordinary Course

An action or routine that falls under the usual and customary conduct of a business or an individual’s daily activities.

Security Interest

A legal claim or right on assets granted to a creditor to secure the repayment of a debt.

Car Buyer

An individual or entity that purchases a vehicle for personal use, commercial use, or resale.