Kertas, Inc. produces paper and office supplies and uses the just-in-time inventory system. Currently, the company is using variable costing. Which of the following is true of the effect of costing systems on the financial results of Kertas? A.Its operating income will vary a little if the company uses absorption costing instead of variable costing. B.Its operating income will be significantly higher if the company uses absorption costing instead of variable costing. C.Its operating income will be negative if the company uses absorption costing instead of variable costing. D.Its operating income will be significantly lower if the company uses absorption costing instead of variable costing.

Just in time inventory system is the system where the Purchase is done only when it is required , so…

Answered: Kertas, Inc. produces paper and office…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 19MC: When the number of units in ending inventory increases through the year, which of the following is...

See similar textbooks

Related questions

Question

100%

Kertas, Inc. produces paper and office supplies and uses the just-in-time inventory system. Currently, the company is using variable costing. Which of the following is true of the effect of costing systems on the financial results of Kertas?

Its operating income will vary a little if the company uses absorption costing instead of variable costing.

Its operating income will be significantly higher if the company uses absorption costing instead of variable costing.

Its operating income will be negative if the company uses absorption costing instead of variable costing.

Its operating income will be significantly lower if the company uses absorption costing instead of variable costing.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions