Which of the Following Statements Is Correct

question 82

Multiple Choice

Which of the following statements is correct?

• A) Inventories under absorption costing are always higher than under variable costing.
• B) Cost of goods sold under absorption costing is always higher than under variable costing.
• C) The amount of fixed overhead expensed under absorption costing is always higher than under variable costing.
• D) Inventories under absorption costing are always higher than under variable costing AND cost of goods sold under absorption costing is always higher than under variable costing.

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Definitions:

Direct Combination Costs

Expenses directly associated with the merging or acquisition of companies, such as legal fees and consultancy charges.

Register and Issue Stock

The process where a company records and distributes new shares of its stock to investors, officially increasing the number of shares available.

Statutory Merger

A legal consolidation of two companies into one entity, as approved by local laws and regulations.

Legal Corporation

A legal corporation is an entity that is legally recognized as a separate entity from its owners, providing limited liability protection to its shareholders.