Answer the Following Questions Using the Information Below

question 93

Multiple Choice

Answer the following questions using the information below:
Stiller Corporation incurred fixed manufacturing costs of $12,000 during 2011. Other information for 2011 includes:
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Operating income using absorption costing will be ________ than operating income if using variable costing.

• A)$4,800 higher
• B)$4,800 lower
• C)$1,800 higher
• D)$7,200 lower

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Definitions:

Modulator Valves

Valves that modulate the pressure of fluids in systems such as automatic transmissions and ABS braking systems, for controlled operation.

Reluctor Wheel

A toothed rotor that is driven through a stationary magnetic field to produce an AC voltage; used as shaft and wheel speed sensors.

Exciter Ring

Preferred term by one OEM for the toothed reluctor used in a wheel speed sensor.

Tone Wheel

Tone wheel, in automotive contexts, refers to a component that works with sensors to monitor the speed of rotating parts like the wheels or crankshaft, generating a signal that varies with speed.