Over an extended period of time in which the final ending inventories are zero,the accumulated net operating income figures reported under absorption costing will be:
A)greater than those reported under variable costing.
B)less than those reported under variable costing.
C)the same as those reported under variable costing.
D)higher or lower since no generalization can be made.

Question

Quizplus · Accepted Answer

When ending inventories are zero, all production costs are expensed, making net operating income the same under both absorption and variable costing.

Over an Extended Period of Time in Which the Final