Quiz19a - Quiz Chapter 19 Solution 1 In an income statement...

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Page 1 Quiz – Chapter 19 - Solution 1. In an income statement prepared as an internal report using the variable costing method, variable selling and administrative expenses would: A) not be used. B) be treated the same as fixed selling and administrative expenses. C) be used in the computation of net operating income but not in the computation of the contribution margin. D) be used in the computation of the contribution margin. The answer is d. All variable costs and expenses are subtracted from Sales Revenue to produce the contribution margin. 2. If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will: The answer is b. The amount by which the operating income reported under absorption costing exceeds the operating income reported under variable costing is given by the following formula.
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