If 400 Units Are Produced and 600 Units Are Sold

question 131

Multiple Choice

If 400 units are produced and 600 units are sold, ________ results in the greatest amount of operating income.

• A)throughput costing
• B)variable costing
• C)absorption costing
• D)period costing
• E)direct costing

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Definitions:

Consumption Sector

A segment of the economy focused on the purchasing and use of goods and services by individuals and households.

Production Sector

The segment of the economy concerned with the production of goods and services, including agriculture, manufacturing, and construction.

Product Purchases

Transactions involving the buying of goods or services for commercial purposes or for use in production.

Maturity Risk Premium

The additional return that investors require for holding a longer-term bond, compensating for the increased risk of price fluctuations and inflation over time.