A reason why absorption costing income statements are sometimes difficult for the manager to interpret is that:
A)they omit variable expenses entirely in computing net operating income.
B)they shift portions of fixed manufacturing overhead from period to period according to changing levels of inventories.
C)they include all fixed manufacturing overhead on the income statement each year as a period cost.
D)they ignore inventory levels in computing income charges.

Fleet Corporation produces a single product. The company manufactured 700 units last year. The ending inventory consisted of 100 units. There was no beginning inventory. Variable manufacturing costs were $6.00 per unit and fixed manufacturing costs were $2.00 per unit. What would be the change in the dollar amount of ending inventory if variable costing was used instead of absorption costing?
A)$800 decrease
B)$200 decrease
D)$200 increase

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. Finance

    Which of the following is not an example of a problem explained by agency theory? a) a manager encounters a conflict of interest between their responsibilities to shareholders and their responsibilities to employees. b)a manager

  2. Algebra

    Su Li has 13 kg of almonds costing $5 per kilogram. How many kilograms of cashews costing $12 per kg should be added to get a mixture of the two nut types costing $7:45 per kg?

  3. Socials Studies

    How would you interpret this questions? Imagine you could go back to the Canada of 1914. What attitudes would you find most difficult to deal with? Why? I just read about society, the Victorians, rights of women, arts and leisure,

  4. Solar Energy Help ASAP

    In the figure below the absorption coefficient as a function of the wavelength for several semiconductor materials is presented. Let's consider monochromatic light of photons with energy of Eph=1.55eV that incidents a film with

  1. Accounting for Managers

    Question 11 of 20 5.0 Points Which of the following accurately describes a difference between job order and process costing systems? A. In job order costing systems, overhead costs are treated as product costs, whereas in process

  2. Physical Education

    You digestive system has three main functions: digestion, absorption, and elimination. In which organ does absorption begin? A)Mouth B)Stomach C)Small intestine (MY ANSWER) D)Gallbladder

  3. Microeconomics - University of Boston

    4. If Cassandra bought 16 cotton blouses last year when her income was $40,000 and she buys 24 cotton blouses this year when her income is $50,000, then what is her income elasticity of demand? Interpret what the income elasticity

  4. Science

    What is one reason why the classification of protists and one kingdom is difficult?

  1. accounting

    When sales are constant, but the production level fluctuates, net operating income determined by the absorption costing method will:

  2. Accounting

    Hanover Corp. obtained the following information from its absorption costing accounting records: Operating Income = $24,000 Total Product Costs Incurred During The Period = $16,000 Value of Beginning Work-In-Process and Finished

  3. ACC

    someone help me with this questions please 1. How would the following costs be classified (product or period) under variable costing at a retail clothing store? Cost of purchasing clothing Sales commissions A) Product Product B)

  4. Accounting

    Adelphia Corporation, which uses absorption costing, just completed its first year of operations. Planned and actual production equaled 13,000 units, and sales totaled 11,700 units at $184 per unit. Cost data for the year are as

You can view more similar questions or ask a new question.