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Which formula reconciles the difference between absorption and variable-costing income?   a. Change in inventory units x predetermined variable-overhead rate per unit. b. Change in inventory units / predetermined variable-overhead rate per unit. c. Change in inventory units x predetermined fixed-overhead rate per unit d. Change in inventory units / predetermined fixed-overhead rate per unit. e. Change in net income x fixed-overhead rate per unit

Which formula reconciles the difference between absorption and variable-costing income?   a. Change in inventory units x predetermined variable-overhead rate per unit. b. Change in inventory units / predetermined variable-overhead rate per unit. c. Change in inventory units x predetermined fixed-overhead rate per unit d. Change in inventory units / predetermined fixed-overhead rate per unit. e. Change in net income x fixed-overhead rate per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which formula reconciles the difference between absorption and variable-costing income?
 
a. Change in inventory units x predetermined variable-overhead rate per unit.
b. Change in inventory units / predetermined variable-overhead rate per unit.
c. Change in inventory units x predetermined fixed-overhead rate per unit
d. Change in inventory units / predetermined fixed-overhead rate per unit.
e. Change in net income x fixed-overhead rate per unit
 
Year 1 Year 2 Year 3 Units produced 6,000 7,000 5,000 Units sold 6,000 6,000 6,000 The selling price, variable costs per unit and total fixed costs are the same for each year.
Transcribed Image Text:Year 1 Year 2 Year 3 Units produced 6,000 7,000 5,000 Units sold 6,000 6,000 6,000 The selling price, variable costs per unit and total fixed costs are the same for each year.
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