THE FOLLOWING INFORMATION REGARDING FIXED PRODUCTION COSTS FROM A...

26. The following information regarding fixed production costs from a manufacturing firm is

available for the current year:

Fixed costs in the beginning inventory P16,000

Fixed costs incurred this period 100,000

Which of the following statements is not true?

a. The maximum amount of fixed production costs that this firm could deduct using

absorption costs in the current year is P116,000.

b. The maximum difference between this firm's the current year income based on

absorption costing and its income based on variable costing is P16,000.

c. Using variable costing, this firm will deduct no more than P16,000 for fixed

production costs.

d. If this firm produced substantially more units than it sold in the current year,

variable costing will probably yield a lower income than absorption costing.