When Comparing the Operating Incomes Between Absorption Costing and Variable

question 98

Multiple Choice

When comparing the operating incomes between absorption costing and variable costing, and beginning finished inventory exceeds ending finished inventory, it may be assumed that

• A)sales increased during the period.
• B)variable cost per unit is less than fixed cost per unit.
• C)absorption costing income exceeds variable costing income.
• D)variable costing income exceeds absorption costing income.
• E)variable costing income equals absorption costing income.

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Definitions:

Standard Deviation

A statistical measurement that sheds light on the dispersion of a dataset, indicating how much individual data points differ from the mean.

Error Relative

A measure of the difference between an observed or calculated value and the true value, often expressed as a percentage.

Causal Forecasting Methods

Forecasting techniques that assume relationships between the item being forecasted and other variables, such as promotional campaigns or economic conditions, to predict future trends.

Environment Factors

External elements, such as regulatory, social, economic, and ecological conditions, that can influence a company's operations and strategic decisions.