Question

Net income reported under absorption costing will exceed net income reported under direct costing for a given period if: Group of answer choices a. Production equals sales for that period. b. Production exceeds sales for that period. c. Sales exceed production for that period. d. The variable overhead exceeds the fixed overhead.

Answer 1

b. Production exceeds sales for that period.

Step-by-step explanation:

This is said to be calculated or gotten from Earnings Before Interest And Taxes(EBIT). This is generally referred to as EBIT. They are returns from investments made in real estate or other forms of investments in a company that is gathered after all taxes and also other interests.

In arithmetic calculations it is done by calculating gross revenue from sales and services and also labour that was been involved. Remove the cost of goods sold, then add expenses from utilities, rent etc.