Philpott's Operating Profit Using Absorption Costing Is $100

question 52

Multiple Choice

Philpott's operating profit using absorption costing is $100. Its inventories using both absorption and variable costing are as follows: Under variable costing, operating profit would be:

• A) $102
• B) $94
• C) $100
• D) $96

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Definitions:

Future Favors

Acts or services performed with the expectation that they will be repaid in the future; often in the context of building reciprocal relationships.

Reciprocity Concept

A social norm suggesting that a favor or good deed should be returned in kind, fostering cooperation and positive relationships among individuals.

Stakeholders

Individuals or groups that have an interest in the success and progression of a company, project, or endeavor.

Competitors

Entities or individuals that are in rivalry against others for the same objective, such as a market share or a race to a finish line.