If a firm produces more units than it sells,absorption costing,relative to variable costing,will result in
A)higher income and assets.
B)higher income but lower assets.
C)lower income but higher assets.
D)lower income and assets.

Question

Quizplus · Accepted Answer

When a firm produces more units than it sells, absorption costing includes fixed manufacturing overhead as part of the cost of the unsold inventory, increasing both income (due to lower cost of goods sold) and assets (due to higher inventory values) compared to variable costing.

If a Firm Produces More Units Than It Sells,absorption Costing,relative