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:

Cultural Relativism

The principle that an individual's beliefs and activities should be understood by others in the context of that individual's own culture.

Folkways

Norms or customary behaviors that are socially approved but not morally significant, dictating appropriate manners and actions in daily routines and interactions.

Severe Punishment

Harsh or extreme disciplinary actions taken in response to an individual's wrongdoing, often intended as a deterrent against future offenses.

Norms

The unwritten rules or standards of behavior considered acceptable within a society or social group.