PFA Ltd Uses a Throughput Costing System and Reported the Following

question 87

Multiple Choice

PFA Ltd uses a throughput costing system and reported the following information for its first month of operations: Units produced…………………………………..140
Units sold………………………………………..120
Material cost per unit produced……………….$3.50
Conversion cost per unit produced……………$6.50
Fixed period costs per unit produced………….$6.00
Variable period costs per unit produced………$4.00
Selling price per unit…………………………$25.00
Under which of the following costing methods would PFA report the highest operating profit?

• A) Absorption costing
• B) Variable costing
• C) Throughput costing
• D) Profit will be equal under all three methods

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Definitions:

Confederate

An individual who is secretly working with the researchers in an experiment, pretending to be a participant but is actually part of the experiment setup.

Staged Manipulation

A technique in experimental research where situations or events are deliberately created by the researcher to elicit a behavior.

Self-Report

A method where individuals provide information about themselves, typically through questionnaires or interviews.

Physiological

Pertaining to the functions and activities of living organisms and their parts, including all physical and chemical processes.