When All of the Units Produced Are Sold,the Operating Income

question 162

Multiple Choice

When all of the units produced are sold,the operating income is the same under both the absorption and variable costing methods.Assume no beginning and ending inventories.Which of the following gives the correct reason for the above statement?

• A) All costs incurred have been recorded as expenses.
• B) A portion of the fixed manufacturing overhead is still in the Finished Goods Inventory account.
• C) All selling and administrative expenses have been recorded as period costs.
• D) Fixed manufacturing costs have not been considered when calculating the operating incomes.

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Definitions:

Hamburgers

A popular fast-food item typically made of ground beef, chicken, or other meats, served inside a split bun.

Government's Revenue

The total income received by the government from its various sources, including taxes, fees, fines, and other charges, used to fund public services and obligations.

Excise Tax

A type of tax charged on goods produced within the country; it is often levied on items such as alcohol, tobacco, and gasoline.

Hamburgers

A widely favored dish made up of a grilled or fried patty of minced meat, typically beef, served between slices of a bun or roll.