Which of the following will not affect Net Income under absorption costing?
A) A change in the levels of inventory from the beginning to the end of the period
B) Production levels not being the same as Sales
C) A change in the fixed overhead application rate
D) An increase in the amount of fixed costs incurred by the company
E) All of the above will affect Net Income

Question

Quizplus · Accepted Answer

Under absorption costing, all the options listed can affect net income. Changes in inventory levels, production levels differing from sales, changes in fixed overhead rates, and increases in fixed costs can all impact the allocation of costs and thus the net income.

Which of the Following Will Not Affect Net Income Under