One Way of Determining the Difference Between Operating Profits for Absorption

Multiple Choice

One way of determining the difference between operating profits for absorption costing and variable costing is to:

A) subtract fixed manufacturing overhead in beginning inventory from fixed manufacturing overhead in ending inventory.
B) add fixed manufacturing costs to the production-volume variance.
C) multiply the number of units produced by the budgeted fixed manufacturing cost rate.
D) subtract sales of the previous period from sales of this period.