Last Year, Clayton Company's Variable Production Costs Totaled £8,000 and Its

question 25

Multiple Choice

Last year, Clayton Company's variable production costs totaled £8,000 and its fixed manufacturing overhead costs totaled £4,800. The company produced 4,000 units during the year and sold 3,600 units. Assuming no units in the beginning stock

• A)under variable costing, the units in ending stock will be costed at £3.20 each.
• B)the net operating income under absorption costing for the year will be £480 lower than net operating income under variable costing.
• C)the ending stock under variable costing will be £480 lower than the ending stock under absorption costing.
• D)the net operating income under absorption costing for the year will be £800 lower than net operating income under variable costing.

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Definitions:

Society's Preference

The collective values and priorities of a community or population, often influencing policy and market trends.

Resources Available

Refers to the total means available for economic and operational development, such as raw materials, manpower, and capital.

Economic Perspective

Viewing issues through the lens of economics, focusing on how resources are allocated, used, and managed to meet needs and achieve objectives.

State Government

The government of a specified state within a country, responsible for local laws and policies distinct from the federal government.