Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than sales

Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than sales

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 20MC: Product costs under variable costing are typically: A. higher than under absorption costing B. lower...

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Question

Variable costing income will be greater than absorption costing income when:

	a.	Sales is greater than production.
	b.	contribution pricing is applied
	c.	Production is less than or equal to sales.
	d.	Production is greater than sales

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Similar questions

How does absorption costing differ from variable costing? When will absorption-costing operating income exceed variable-costing operating income?
In the cost equation Y=a+bx, Y represents which of the following? A. fixed costs B. variable costs C. total costs D. units of production
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When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
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Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis? Select one: a. As long as the contribution margin is a positive number, net income will be positive b. As long as variable costs are more than fixed costs, net income will be negative c. As long as the contribution margin is greater than fixed costs, net income will be positive d. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive
Select the correct statement concerning the cost-volume-profit graph at right: a. The point identified by "B" is the break-even point. b. Line F is the variable cost line. c. At point B, profits equal total costs. d. Line E is the total cost line. Line F Line E Line D