When Production Is Greater Than Sales,the Operating Income Will Be

question 134

Multiple Choice

When production is greater than sales,the operating income will be higher under absorption costing than variable costing.Assume zero 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 ending 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 profits.

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Definitions:

Retrieval Cues

Stimuli that help you retrieve a certain memory.

Long-Term Memory

A type of memory responsible for the storage of information over an extended period of time, ranging from several minutes to decades.

Accessibility

The ease with which information can be retrieved from memory.

Nondeclarative Memory

A type of long-term memory that doesn't require conscious thought to recall, often involving skills and tasks.