Accounting · Cost and Management Accounting
Given below are two statements: One is labelled as Assertion A and the other is labelled as Reason R. Assertion A: If the production volume is 10,000 units and total sales are 5,000 units, with a selling price per unit of ₹12, variable cost per unit of ₹6, and fixed cost per year of ₹40,000, then absorption costing will show a higher profit than variable (marginal) costing. Reason R: Variable costing considers full cost (including fixed overheads) for product costing and inventory valuation. In the light of the above statements, choose the most appropriate answer:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1A is not correct but R is correct
- 2A is correct but R is not correct✓
- 3Both A and R are correct but R is NOT the correct explanation of A
- 4Both A and R are correct and R is the correct explanation of A
Correct answer
A is correct but R is not correct
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Cost and Management Accounting MCQs →Want more practice questions on Cost and Management Accounting?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Cost and Management Accounting