Question

Net operating income computed using absorption costing will always be less than net operating income computed...

Net operating income computed using absorption costing will always be less than net operating income computed using variable costing.

TRUE OR FALSE

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In general, if inventory increases during an accounting period, ________. absorption costing will report less operating...
In general, if inventory increases during an accounting period, ________. absorption costing will report less operating income than variable costing variable costing will report less operating income than absorption costing variable costing and absorption costing will report the same operating income both variable costing and absorption costing will show losses
Under variable costing, A. inventory costs will be lower than under absorption costing. B. inventory costs...
Under variable costing, A. inventory costs will be lower than under absorption costing. B. inventory costs will be higher than under absorption costing. C. net operating income will always be lower than under absorption costing. D. net operating income will always be higher than under absorption costing.
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $62 per unit) $ 1,240,000 $ 1,860,000 Cost of goods sold (@ $34 per unit) 680,000 1,020,000 Gross margin 560,000 840,000 Selling and administrative expenses* 311,000 341,000 Net operating income $ \249,000\ $ 499,000 * $3 per unit variable; $251,000 fixed each year. The company’s $34 unit product cost is computed as follows: Direct materials $ 7...
Operating income determined using absorption costing can be reconciled to operating income determined using variable costing...
Operating income determined using absorption costing can be reconciled to operating income determined using variable costing by computing the difference between which of the following? Select one: a. Gross margin (absorption costing method) and contribution margin (variable costing method).cross out b. Discretionary costs included in the beginning and ending inventories.cross out c. Sales as recorded under the variable costing method and sales as recorded under the absorption costing method.cross out d. Fixed manufacturing overhead costs deferred in or released from...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 1,098,000 $ 1,708,000 Cost of goods sold (@ $40 per unit) 720,000 1,120,000 Gross margin 378,000 588,000 Selling and administrative expenses* 307,000 337,000 Net operating income $ 71,000 $ 251,000 * $3 per unit variable; $253,000 fixed each year. The company’s $40 unit product cost is computed as follows: Direct materials $ 6...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $62 per unit) $ 1,054,000 $ 1,674,000 Cost of goods sold (@ $43 per unit) 731,000 1,161,000 Gross margin 323,000 513,000 Selling and administrative expenses* 299,000 329,000 Net operating income $ 24,000 $ 184,000 * $3 per unit variable; $248,000 fixed each year. The company’s $43 unit product cost is computed as follows: Direct materials $ 9...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $63 per unit) $ 1,260,000 $ 1,890,000 Cost of goods sold (@ $34 per unit) 680,000 1,020,000 Gross margin 580,000 870,000 Selling and administrative expenses* 311,000 341,000 Net operating income $ \269,000\ $ 529,000 * $3 per unit variable; $251,000 fixed each year. The company’s $34 unit product cost is computed as follows: Direct materials $ 9...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $63 per unit) $ 1,197,000 $ 1,827,000 Cost of goods sold (@ $46 per unit) 874,000 1,334,000 Gross margin 323,000 493,000 Selling and administrative expenses* 305,000 335,000 Net operating income $ \18,000\ $ 158,000 * $3 per unit variable; $248,000 fixed each year. The company’s $46 unit product cost is computed as follows: Direct materials $ 10...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 915,000 $ 1,525,000 Cost of goods sold (@ $37 per unit) 555,000 925,000 Gross margin 360,000 600,000 Selling and administrative expenses* 297,000 327,000 Net operating income $ \63,000\ $ 273,000 * $3 per unit variable; $252,000 fixed each year. The company’s $37 unit product cost is computed as follows: Direct materials $ 6...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $60 per unit) $ 1,080,000 $ 1,680,000 Cost of goods sold (@ $41 per unit) 738,000 1,148,000 Gross margin 342,000 532,000 Selling and administrative expenses* 307,000 337,000 Net operating income $ 35,000 $ 195,000 * $3 per unit variable; $253,000 fixed each year. The company’s $41 unit product cost is computed as follows: Direct materials $ 9...