When All of the Units Produced Are Sold,the Operating Income

question 162

Multiple Choice

When all of the units produced are sold,the operating income is the same under both the absorption and variable costing methods.Assume no 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 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 incomes.

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Definitions:

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The collective efforts and inputs provided by all members of a team towards achieving a common goal or completing a project.

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In a manner related to the government, public affairs, or the administration of the state or other political unit.

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The improper, inefficient, or unethically handling of materials, time, or assets, often resulting in waste or loss.

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The common principles, convictions, and standards that affect how organization members engage with one another and with stakeholders.