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7 years ago
When production is greater than sales, the operating income will be higher under absorption costing than variable costing. Assume zero beginning and ending inventories. Which of the following gives the correct reason for the above statement?
A) A portion of the fixed manufacturing overhead is still in the ending Finished Goods Inventory account.
B) Fixed manufacturing costs have not been considered when calculating the operating profits.
C) All costs incurred have been recorded as expenses.
D) All selling and administrative expenses have been recorded as period costs.
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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7 years ago
Makes perfect sense, thx
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