Which of the following statements is true concerning income if production exceeds units sold?
A)A higher operating income will result under a variable costing income statement.
B)A lower operating income will result under an absorption costing income statement.
C)A higher operating income will result under an absorption costing income statement.
D)The same operating income will result under both a variable costing and absorption costing income statement.

Question

Quizplus · Accepted Answer

When production exceeds units sold, under absorption costing, fixed manufacturing overhead costs are spread over more units, lowering the cost per unit sold and increasing operating income compared to variable costing, where fixed overhead is expensed in the period incurred.

Which of the Following Statements Is True Concerning Income If