Suppose Production Is Less Than Sales Volume

question 34

Multiple Choice

Suppose production is less than sales volume.What is the relationship between net income under absorption costing and profits when using variable-costing procedures?

• A)Net income under absorption costing will be greater than profits when using variable costing.
• B)Net income under absorption costing will be less than profits when using variable costing.
• C)Net income under absorption costing will be equal to profits when using variable costing.
• D)Net income under absorption costing will be randomly different from profits when using variable costing.

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