Which of the following conditions would cause absorption-costing net income to be lower than variable-costing net income?
A)Units sold exceeded units produced.
B)Units sold equaled units produced.
C)Units sold were less than units produced.
D)Sales prices decreased.
E)Selling expenses increased.

Question

Quizplus · Accepted Answer

When units sold exceed units produced, inventory levels decrease, leading to a release of fixed manufacturing costs from inventory under absorption costing, which reduces net income compared to variable costing.

Which of the Following Conditions Would Cause Absorption-Costing Net Income