1. Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies?
a. only absorption costing
b. both variable and absorption costing
c. only variable costing
d. neither variable nor absorption costing
2. The amount of income under absorption costing will be less than the amount of income under variable costing when units manufactured:
a. exceed units sold
b. equal units sold
c. are equal to or greater than units sold
d. are less than units sold
3. In the variable costing income statement, deduction of variable selling and administrative expenses from manufacturing margin yields:
a. contribution margin
b. gross profit
c. differential margin
d. marginal expenses