Asked by Sayuri Yamane on Jun 16, 2024
Verified
The super-variable costing net operating income period can be computed by multiplying the number of units sold by the gross margin per unit.
Net Operating Income
Earnings from a company's core business operations, excluding deductions for interest and taxes.
Gross Margin
represents the difference between revenue and cost of goods sold divided by revenue, showcasing the percentage of sales that exceeds the cost of goods sold.
- Understand the consequences of different costing approaches on net operating income and inventory control.
Verified Answer
AA
Angela AntrilliJun 22, 2024
Final Answer :
False
Explanation :
The net operating income under variable costing is calculated by deducting only the variable expenses from the sales, whereas the gross margin is calculated by deducting the cost of goods sold from sales. Therefore, the net operating income under variable costing cannot be computed by multiplying the number of units sold by the gross margin per unit.
Learning Objectives
- Understand the consequences of different costing approaches on net operating income and inventory control.