In General, If Inventory Increases During an Accounting Period

question 60

Multiple Choice

In general, if inventory increases during an accounting period,

• A)variable costing will report less operating income than absorption costing.
• B)absorption costing will report less operating income than variable costing.
• C)variable costing and absorption costing will report the same operating income.
• D)None of the above are correct.

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Definitions:

Quantity Of Performance

A measure of the amount of work completed within a given time frame, often used to gauge productivity.

Quality Of Performance

The degree to which a task is completed with accuracy, efficiency, and adherence to standards.

Extrinsic Rewards

Rewards from an external source, often used as motivation, such as money, grades, or praise.

Intrinsic Motivation

The driving force behind actions that are carried out for their own sake and for the internal fulfillment they provide.