There is no difference between variable-costing and absorption-costing income if there is no_____.
A)beginning inventory
B)ending inventory
C)change in inventory level
D)variable overhead cost

Question

Quizplus · Accepted Answer

The difference between variable-costing and absorption-costing income is due to the treatment of fixed manufacturing overhead costs. Under absorption costing, fixed overhead costs are allocated to units produced, whereas under variable costing, fixed overhead costs are treated as a period cost and expensed in the period in which they are incurred. If there is no change in inventory levels (i.e. no beginning or ending inventory), then the amount of fixed overhead costs allocated to units produced will be the same under both costing methods. Therefore, there will be no difference in income between the two.

There Is No Difference Between Variable-Costing and Absorption-Costing Income If