Net Income Reported Under Absorption Costing Will Exceed Net Income

question 202

Multiple Choice

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

• A) production equals sales for that period.
• B) production exceeds sales for that period.
• C) sales exceed production for that period.
• D) variable overhead exceeds fixed overhead for that period.

---

Definitions:

Relatively Permanent Change

A lasting alteration in behavior or knowledge due to experience or learning.

Experience

The knowledge or skill acquired by a period of practical involvement in an activity or exposure to events or situations.

Reflexive Response

An automatic, involuntary reaction to a stimulus, such as the knee-jerk reflex.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without any prior learning or conditioning.