When the units produced is greater than the units sold,
A)variable and fixed manufacturing overhead costs are deferred until a future period when using absorption costing.
B)variable and fixed manufacturing overhead costs are deferred until a future period when using variable costing.
C)some fixed manufacturing overhead costs are deferred until a future period when using absorption costing.
D)some variable manufacturing overhead costs are deferred until a future period when using absorption costing.

Question

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overhead costs are included in the cost of inventory. When production exceeds sales, some of these costs are deferred in inventory until the units are sold in a future period.

When the Units Produced Is Greater Than the Units Sold