Assuming the number of units sold and produced are the same, which of the following statements is true when comparing net income using absorption and variable costing?
A)Net income will be the same under both methods.
B)Variable costing will yield a higher net income.
C)Variable costing will have higher sales revenue.
D)Absorption costing will yield a higher net income.
E)None of these statements is true.

Question

Quizplus · Accepted Answer

When the number of units sold and produced are the same, there is no difference in inventory levels, so net income will be the same under both absorption and variable costing methods.

Assuming the Number of Units Sold and Produced Are the Same