Question
King Tooling has produced and sold the following number of units of their only product during their first two years in business: Produced Sold Year
King Tooling has produced and sold the following number of units of their only product during their first two years in business:
|
| Produced | Sold |
|---|---|---|
| Year ended December 31, Year 1 | 50,000 | 40,000 |
| Year ended December 31, Year 2 | 50,000 | 55,000 |
Production costs per unit have not changed over the two-year period. Under variable costing, what is the amount of operating income relative to the operating income shown on the GAAP income statement of thecompany?
A.
| Year 1 | Year 2 |
|---|---|
| Higher | Higher |
B.
| Year 1 | Year 2 |
|---|---|
| Lower | Lower |
C.
| Year 1 | Year 2 |
|---|---|
| Higher | Lower |
D.
| Year 1 | Year 2 |
|---|---|
| Lower | Higher |
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Health And Safety Environment And Quality Audits A Risk Based Approach
Authors: Stephen Asbury
4th Edition
1032427574, 978-1032427577
