Which of the Following Situations Would Cause Variable-Costing Income to Be

question 39

Multiple Choice

Which of the following situations would cause variable-costing income to be higher than absorption-costing income?

• A) Units sold equaled 39,000 and units produced equaled 42,000.
• B) Units sold and units produced were both 42,000.
• C) Units sold equaled 55,000 and units produced equaled 49,000.
• D) Sales prices decreased by $7 per unit during the accounting period.
• E) Selling expenses increased by 10% during the accounting period.

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Definitions:

IFRS

International Financial Reporting Standards, a set of global accounting standards for financial reporting.

U.S. GAAP

United States Generally Accepted Accounting Principles, which are a set of rules and standards for financial reporting.

Long-Lived Asset

Assets used in the operations of a business that are expected to provide economic benefits for a period longer than one year.

Net Book Value

The value of an asset after subtracting accumulated depreciation from its original cost, synonymous with carrying value but rephrased for clear understanding.