If the Number of Units Produced Is Less Than the Number

question 66

Multiple Choice

If the number of units produced is less than the number of units sold,which of the following statements is true when comparing operating profit under absorption versus variable costing?

• A)Sales revenue will be less when absorption costing is used.
• B)Absorption costing will produce a higher operating profit.
• C)Operating profit is the same under both methods.
• D)Variable costing will produce a higher operating profit.
• E)None of the answer choices is correct.

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Definitions:

Extrinsic Reward

A type of reward that is external to the individual, such as money, bonuses, or other tangible benefits, used to motivate performance.

Pay For Performance

A compensation strategy where employee pay is directly linked to their performance, often measured through objectives, metrics, or outcomes.

Meaningful Work

Work that is perceived to have significance and purpose by an individual, contributing to a sense of personal accomplishment and satisfaction.

Compensation Management

The practice of designing and implementing reward strategies and structures to fairly and effectively compensate employees for their contributions to the organization.