Under absorption costing when production equals sales in a year
A)Inventory values and cost of goods sold are higher than under variable costing.
B)Inventory values and cost of goods sold are lower than under variable costing.
C)Inventory values and cost of goods sold are the same as under variable costing.
D)Inventory values are higher and cost of goods sold is lower than under variable costing.

Question

Quizplus · Accepted Answer

Under absorption costing, when production equals sales, there is no change in inventory levels, so inventory values and cost of goods sold are the same as under variable costing.

Under Absorption Costing When Production Equals Sales in a Year