Which statement about the "death spiral" is correct? It occurs when production volume is falling, firms assign fixed costs to product using normal capacity (used capacity) and make pricing decisions based on product costs. It occurs when production volume is falling, firms assign fixed costs to products using practical capacity (supplied capacity) and make pricing decisions based on product costs. None of the given choices are correct It occurs when production volumes is increasing, firms assign fixed costs to products and make pricing decisions based on product costs. It occurs when production volume is falling, firms assign variable costs to products and make pricing decisions based on product costs Question 7 10 Where the fixed overhead rate in both opening and closing inventories is the same, which of the following statements is correct? Absorption costing profit is always greater than variable costing profit. If inventory remains the same, absorption costing profit will be greater than variable costing proft. If inventory has increased, absorption costing profit will be greater than variable costing profit. If inventory has decreased, absorption costing profit will be greater than variable costing profit. None of the given choices are correct Classix Products reported $28,000 in net profit for the year using variable costing. The company had no units in beginning inventory, planned and actual production was 30,000 units, and sales were 25,000 units during the year. Variable manufacturing costs were $15 per unit and total budgeted fixed manufacturing overhead was $150,000. There was no underapplied or overapplied overhead reported during the year. Determine the net profit under absorption costing. $58,000 $30,000 $53,000 None of the given choices are correct $28,000