Multiple Choice
Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________.
A) greater operating income and therefore increasing the manager's bonus
B) less operating income and therefore decreasing the manager's bonus
C) not affecting the manager's bonus
D) being unable to determine the manager's bonus using only the above information
Correct Answer:
Verified
Correct Answer:
Verified
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