One Way of Determining the Difference Between Operating Profits for Absorption

question 99

Multiple Choice

One way of determining the difference between operating profits for absorption costing and variable costing is to:

• A)subtract fixed manufacturing overhead in beginning inventory from fixed manufacturing overhead in ending inventory.
• B)add fixed manufacturing costs to the production-volume variance.
• C)multiply the number of units produced by the budgeted fixed manufacturing cost rate.
• D)subtract sales of the previous period from sales of this period.