All differences between super-variable costing and variable costing net operating income are explained by the accounting for manufacturing overhead costs.

Question

Quizplus · Accepted Answer

Variable costing and absorption costing (sometimes referred to as "super-variable costing" in the question, though this term is not standard) differ in how they treat fixed manufacturing overhead costs. Variable costing includes only variable manufacturing costs in product costs, while absorption costing includes both variable and fixed manufacturing costs. The differences in net operating income between the two methods arise because of how fixed manufacturing overhead is treated: expensed in the period incurred under variable costing, but allocated to units produced and possibly inventoried under absorption costing.

All Differences Between Super-Variable Costing and Variable Costing Net Operating