17 What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing? Select one: a. Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs. b. Absorption costing considers all manufacturing costs in the determination of operating income, whereas variable costing considers only prime costs. c. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories, and variable costing considers all fixed manufacturing costs as period costs. d. Absorption costing includes all variable manufacturing costs in product costs, but variable costing considers variable manufacturing costs to be period costs.
17 What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing? Select one: a. Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs. b. Absorption costing considers all manufacturing costs in the determination of operating income, whereas variable costing considers only prime costs. c. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories, and variable costing considers all fixed manufacturing costs as period costs. d. Absorption costing includes all variable manufacturing costs in product costs, but variable costing considers variable manufacturing costs to be period costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
17
What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing?
Select one:
a. Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs.
b. Absorption costing considers all manufacturing costs in the determination of operating income, whereas variable costing considers only prime costs.
c. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories, and variable costing considers all fixed manufacturing costs as period costs.
d. Absorption costing includes all variable manufacturing costs in product costs, but variable costing considers variable manufacturing costs to be period costs.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education