The Difference Between Operating Incomes Under Variable Costing and Absorption

question 120

Multiple Choice

The difference between operating incomes under variable costing and absorption costing centers on how to account for:

• A)direct materials costs
• B)fixed manufacturing costs
• C)variable manufacturing costs
• D)Both B and C are correct.

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Definitions:

Cognitive Activity

Mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, and problem-solving.

Solving

The process of finding a solution to a problem or challenge through logical reasoning, experimentation, or other methods.

Remembering

The cognitive process of retrieving past experiences, information, and events from the memory store.

Generative

Relating to the capacity to produce or create something, often used in linguistics to refer to the ability of language to generate an infinite number of sentences.