If the Number of Units Produced Exceeds the Number of Units

question 156

Multiple Choice

If the number of units produced exceeds the number of units sold,then net operating income under absorption costing will:

• A)be equal to the net operating income under variable costing.
• B)be greater than net operating income under variable costing.
• C)be equal to the net operating income under variable costing plus total fixed manufacturing costs.
• D)be equal to the net operating income under variable costing less total fixed manufacturing costs.

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Definitions:

Risk of Loss

Refers to the risk that an item may be damaged, destroyed, or lost, and determines which party is responsible for bearing that risk at different points in a transaction.

Negotiable Warehouse Receipt

A document used in the trading of stored goods which proves the holder is entitled to take possession of the goods, and it is transferable by endorsement.

Bailee's Consent

the agreement or permission given by a bailee, a person or entity in temporary possession of another's property, to perform a certain action with or pertaining to that property.

Method of Payment

This refers to the way in which a payment is made for a transaction, which can include cash, credit card, cheque, or electronic transfers.