If the number of units sold is the same every month,the profit from these units will be the same every month if:
A)absorption costing is used.
B)variable costing is used.
C)production is greater than sales.
D)sales is greater than production.

Question

Quizplus · Accepted Answer

Variable costing method only considers the variable costs associated with producing the units, which remain fixed per unit regardless of the volume of production. Therefore, if the number of units sold is the same every month, the profit from these units will be the same every month if variable costing is used. Absorption costing considers both fixed and variable costs, hence the profit may not remain the same every month even if the number of units sold stays constant. Production and sales volumes do not affect the choice of costing method for calculating profit.

If the Number of Units Sold Is the Same Every