Routsong Corporation Had the Following Sales and Production for the Past

question 162

Multiple Choice

Routsong Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year.There were no beginning inventories in Year 1.Which of the following statements is NOT correct?

• A)Under variable costing, net operating income for Year 1 and Year 2 would be the same.
• B)Because of the changes in production levels, under variable costing the unit product cost will change each year.
• C)The total net operating income for all four years combined would be the same under variable and absorption costing.
• D)Under absorption costing, net operating income in Year 4 would be less than the net operating income in Year 2.

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Definitions:

Hierarchical

Pertains to a system organized in a ranked order or levels, each level subordinate to the one above it.

Rule Of Thumb

A practical and approximate way of doing or measuring something, based on experience rather than exact calculation.

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Representativeness Heuristic

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