Question:524 CC uses absorption (full) costing and its direct competitor, FF uses variable costing for internal decision-making purposes. Last year, both companies reported the same production and sales volumes. Which is true? A. If sales are 10,000 units and production 12,000 units, CC's net income exceeds FF's. B. If sales are 10,000 units and production 10,000 units, FF's net income exceeds CC's. C. If sales are 10,000 units and production 8,000 units, FF's net income exceeds CC's. D. If sales are 12,000 units and production 10,000 units, FF's net income equals CC's. E. Unable to determine.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 19MC: When the number of units in ending inventory increases through the year, which of the following is...
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Question:524
CC uses absorption (full) costing and its direct competitor, FF uses
variable costing for internal decision-making purposes. Last year, both
companies reported the same production and sales volumes. Which is
true?
A. If sales are 10,000 units and production 12,000 units, CC's net
income exceeds FF's.
B. If sales are 10,000 units and production 10,000 units, FF's net
income exceeds CC's.
C. If sales are 10,000 units and production 8,000 units, FF's net income
exceeds CC's.
D. If sales are 12,000 units and production 10,000 units, FF's net
income equals CC's.
E. Unable to determine.
Transcribed Image Text:Question:524 CC uses absorption (full) costing and its direct competitor, FF uses variable costing for internal decision-making purposes. Last year, both companies reported the same production and sales volumes. Which is true? A. If sales are 10,000 units and production 12,000 units, CC's net income exceeds FF's. B. If sales are 10,000 units and production 10,000 units, FF's net income exceeds CC's. C. If sales are 10,000 units and production 8,000 units, FF's net income exceeds CC's. D. If sales are 12,000 units and production 10,000 units, FF's net income equals CC's. E. Unable to determine.
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