Income ________ when there is zero beginning inventory and all inventory units produced are sold.
A)Will be lower under variable costing than absorption costing
B)Will be the same under both variable and absorption costing
C)Will be higher under variable costing than absorption costing
D)Will be higher than gross margin under variable costing
E)Will be lower than administrative costs under absorption costing

Question

Quizplus · Accepted Answer

When there is zero beginning inventory and all units produced are sold, there is no difference in inventory levels at the beginning and end of the period under both costing methods. Therefore, the treatment of fixed manufacturing overhead costs does not affect income, making it the same under both variable and absorption costing.

Income ________ When There Is Zero Beginning Inventory and All