Expected sales for next year for the B Division is 120,000 units. Mr. Santos, the manager of the B Division, is under pressure to improve the performance of the Division. As plans for next year, he has to decide whether to produce 120,000 units or 140,000 units Division will have higher net income, if Mr. Santos decides to a. produce 140,000 units if income is measured under absorption costing. b. produce 140,000 units if income is measured under variable costing. c. produce 120,000 units if income is measured under absorption costing. d. produce 120,000 units if income is measured under variable costing.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Expected sales for next year for the B Division is 120,000 units. Mr. Santos, the manager of the B
Division, is under pressure to improve the performance of the Division. As plans for next year,
he has to decide whether to produce 120,000 units or 140,000 units Division will have higher net
income, if Mr. Santos decides to
a. produce 140,000 units if income is measured under absorption costing.
b. produce 140,000 units if income is measured under variable costing.
c. produce 120,000 units if income is measured under absorption costing.
d. produce 120,000 units if income is measured under variable costing.

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