H6&7 Help Save & Exh Sutant Which of the following is true of a company that uses absorption costing? Multiple Choice Fixed production and fixed selling costs are considered to be product costs. Variable selling expenses are included in product costs. Net operating income fluctuates directly with changes in sales volume. Unit product costs can change as a result of changes in the number of units manufactured. Save & Exh When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will: Multiple Choice fluctuate inversely with changes in production. remain constant. be greater than net operating income under absorption costing. O fluctuate in direct proportion to changes in production When sales exceed production and the company uses the LIFO Inventory flow assumption, the net operating income reported under variable costing generally will be: Multiple Choice less than net operating income reported under absorption costing. greater than net operating income reported under absorption costing. O higher or lower because no generalization can be made. O equal to net operating income reported under absorption costing.