The following information regarding fixed production costs from a manufacturing firm is available for the current year: Which of the following statements is not true?
A) The maximum amount of fixed production costs that this firm could deduct using absorption costs in the current year is $116,000.
B) The maximum difference between this firm's the current year income based on absorption costing and its income based on variable costing is $16,000.
C) Using variable costing, this firm will deduct no more than $16,000 for fixed production costs.
D) If this firm produced substantially more units than it sold in the current year, variable costing will probably yield a lower income than absorption costing.

Question

The following information regarding fixed production costs from a manufacturing firm is available for the current year:  Which of the following statements is not true?
A) The maximum amount of fixed production costs that this firm could deduct using absorption costs in the current year is $116,000. 
B) The maximum difference between this firm's the current year income based on absorption costing and its income based on variable costing is $16,000. 
C) Using variable costing, this firm will deduct no more than $16,000 for fixed production costs. 
D) If this firm produced substantially more units than it sold in the current year, variable costing will probably yield a lower income than absorption costing.

Quizplus · Accepted Answer

The Answer of The following information regarding fixed production costs from a manufacturing firm is available for the current year:  Which of the following statements is not true?
A) The maximum amount of fixed production costs that this firm could deduct using absorption costs in the current year is $116,000. 
B) The maximum difference between this firm's the current year income based on absorption costing and its income based on variable costing is $16,000. 
C) Using variable costing, this firm will deduct no more than $16,000 for fixed production costs. 
D) If this firm produced substantially more units than it sold in the current year, variable costing will probably yield a lower income than absorption costing.

The Following Information Regarding Fixed Production Costs from a Manufacturing