Question 14 Blue Haven Computers' sales volume is below its production volume for the month. How will profit margin differ on an absorption costing income statement from profit margin on a variable costing Income statement? Profit margin will be higher on a variable costing income statement. O Profit will be higher on an absorption costing income statement. O Both amounts will be the same. The costs are just located in different sections of the two statements. O It depends on the number of cost pools the company uses to allocate capacity costs.
Question 14 Blue Haven Computers' sales volume is below its production volume for the month. How will profit margin differ on an absorption costing income statement from profit margin on a variable costing Income statement? Profit margin will be higher on a variable costing income statement. O Profit will be higher on an absorption costing income statement. O Both amounts will be the same. The costs are just located in different sections of the two statements. O It depends on the number of cost pools the company uses to allocate capacity costs.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 4CE: Refer to Cornerstone Exercise 18.3. Required: 1. Calculate the cost of each unit using variable...
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Transcribed Image Text:Practice Question 14
Blue Haven Computers' sales volume is below its production volume for the month. How will profit margin differ on an absorption costing income statement from profit
margin on a variable costing income statement?
O Profit margin will be higher on a variable costing income statement.
Profit will be higher on an absorption costing income statement.
O Both amounts will be the same. The costs are just located in different sections of the two statements.
O It depends on the number of cost pools the company uses to allocate capacity costs.
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