How Will Net Income React Using the Variable Costing Method

question 80

Multiple Choice

How will net income react using the variable costing method, assuming monthly production volume is constant but fewer items are sold during the period than are produced in that same period?

• A) Net income will be equal to contribution margin per unit times units sold.
• B) Net income will be equal to net income determined using the absorption costing method.
• C) Net income will be less than net income determined using the absorption costing method.
• D) Net income will be greater than net income determined using the absorption costing method.

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