Crossbow Corp

question 69

Multiple Choice

Crossbow Corp.produces a single product.Data concerning June's operations follow: For the year in question, net operating income under variable costing will be:

• A)higher than net operating income under absorption costing.
• B)lower than net operating income under absorption costing.
• C)the same as net operating income under absorption costing.
• D)The relation between absorption costing and variable costing net operating income cannot be determineD.Because production exceeds sales, the net operating income for variable costing will be lower than for absorption costing.This occurs because under absorption costing, some of the fixed manufacturing overhead cost is deferred in ending inventories.

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Definitions:

Escalation Of Commitment

The tendency to continue to support a failing course of action.

Risk Averse

This term describes individuals or organizations that prefer to minimize risks, often opting for safer, more predictable outcomes.

Z Problem-solving Model

A methodological approach to problem-solving that involves examining issues from multiple perspectives to find sustainable solutions.

Nonpreferences

The absence of a preference or inclination towards one option over another, often resulting in indecision or a neutral stance.