If inventory has not increased or decreased, but has stayed the same, operating income will be the same under variable costing and absorption costing.

Question

Quizplus · Accepted Answer

Under both variable costing and absorption costing, if inventory levels remain constant (no increase or decrease), the operating income will be the same because there are no changes in inventory levels to cause a difference in how fixed manufacturing overheads are treated under the two methods.

If Inventory Has Not Increased or Decreased, but Has Stayed