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:

Long-Day Plant

A plant that flowers in response to shortening nights; also called short-night plant. Compare with short-day, intermediate-day, and day-neutral plants.

Critical Period

A specific time in an organism's development when it is particularly sensitive to certain environmental stimuli or experiences, which can have long-lasting effects on its future behavior and development.

Short-Day Plant

A plant that flowers in response to lengthening nights; also called long-night plant. Compare with long-day, intermediate-day, and day-neutral plants.

Cucumber

A widely cultivated plant in the gourd family, Cucurbitaceae, known for its elongated green fruit typically consumed as a vegetable.