When Production Quantity Exceeds Sales, Throughput Costing Results in Reporting

question 128

True/False

When production quantity exceeds sales, throughput costing results in reporting lower operating income than variable costing.

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Definitions:

Cash Dividend

A payment made by a company out of its earnings to its shareholders, usually in the form of cash.

Net Income

The income a company retains following the deduction of all costs and taxes from its total earnings.

Goodwill

An intangible asset that arises when a company acquires another business for more than the value of its tangible and identifiable intangible assets.

Outstanding Voting Shares

The total number of shares of a corporation's stock that are currently owned by shareholders and have the right to vote.