Question 1: Which of the following represents the normal sequence in which the indicated budgets are prepared?
A. Direct Materials, Cash Sales
B. Production, Cash, Income Statement
C. Sales, Balance Sheet, Direct Labor
D. Production, Manufacturing Overhead, Sales
Question 2: Over an extended period of time in which the final ending inventories are zero, the accumulated net operating income figures reported under absorption costing will be:
A. greater than those reported under variable costing
B. less than those reported under variable costing
C. the same as those reported under variable costing
D. higher or lower since no generalization can be made