Routit Corporation Had the Following Sales and Production for the Past

question 43

Multiple Choice

Routit 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 correct?

• A)Under variable costing, net operating income for Year 3 and Year 4 would be the same.
• B)Under variable costing, net operating income for Year 2 and Year 3 would be the same.
• C)Variable costing net income would exceed absorption costing net income in Year 1.
• D)Absorption costing net income would exceed variable costing net income in Year 4.

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Definitions:

Adipose Tissue

A type of body fat used for storing energy and providing insulation to the body.

Collagen And Elastin

Two structural proteins found in connective tissues in the body, where collagen provides strength and elastin allows elasticity and flexibility.

Extracellular Matrix

A sophisticated mesh of proteins and polysaccharides released by cells that offer both structural and biochemical assistance to adjacent cells.

Loose Connective Tissue

Connective tissue that consists of fibroblasts and fibers scattered in a gel-like matrix.