The Level of Inventory of a Manufactured Product Has Increased

question 2

Multiple Choice

The level of inventory of a manufactured product has increased by 8,000 units during a period.The following data are also available: ​
What would be the effect on income from operations if absorption costing is used rather than variable costing?

• A) $80,000 decrease
• B) $80,000 increase
• C) $104,000 increase
• D) $104,000 decrease

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Definitions:

Bilateral Contract

A type of agreement where both parties make a promise to each other to perform certain acts or refrain from performing certain acts.

Liquidated Debt

A debt with a fixed and determinable amount that is agreed upon by both parties.

Accord And Satisfaction

A legal concept where parties to a dispute resolve their differences through a mutually agreed upon solution, often involving payment in exchange for dropping a claim.

Unliquidated Debt

A debt for which the exact value has not been determined, often due to disputes over amount or the presence of damages.