When Reconciling Variable Costing and Absorption Costing Net Operating Income

question 45

True/False

When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs released from inventory under absorption costing should be deducted from variable costing net operating income to arrive at the absorption costing net operating income.

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Definitions:

FICA Taxes

Federal Insurance Contributions Act taxes are payroll taxes deducted from employees' paychecks and matched by employers to fund Social Security and Medicare.

Medicare Taxes

Taxes collected in the United States to fund the Medicare program, typically withheld from employee earnings.

Union Dues

Fees paid by workers to labor unions for membership and benefits.

Medical Insurance

A policy that covers the cost of an insured individual's medical and surgical expenses, either directly paid to the healthcare provider or reimbursed to the insured.