Operating income reported on the end-of-period financial statements is changed when ________ is used to handle the production-volume variance at the end of the accounting period.
A) the adjusted allocation-rate approach
B) the proration approach
C) the write-off variances to cost of goods sold approach
D) the reinstatement approach

Question

Quizplus · Accepted Answer

The write-off variances to cost of goods sold approach directly affects operating income because it adjusts the cost of goods sold, which is a component of the income statement, thereby impacting the reported operating income.

Operating Income Reported on the End-Of-Period Financial Statements Is Changed