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    Variable costing and absorption costing, CVP analysis

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    1) Income using variable costing can differ from income using absorption costing
    (true or false)

    2) Under the assumptions used in cost-volume-profit analysis, as volume increases:
    a. fixed costs increase in proportion to the increase in volume
    b. variable costs per unit remain the same
    c. fixed costs per unit remain the same
    d. variable costs per unit increase in proportion to the increase in volume.

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    Solution Preview

    1) Income using variable costing can differ from income using absorption costing

    TRUE

    Variable costing treats fixed manufacturing overhead costs as period costs and not product costs. Hence, ...

    Solution Summary

    Answers 2 multiple choice questions on Variable costing and absorption costing, cost-volume-profit (CVP) analysis.

    $2.19

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