For the month noted,what was the relationship between the operating income under variable costing as opposed to under absorption costing?
A) Higher than operating income under absorption costing.
B) Lower than operating income under absorption costing.
C) The same as operating income under absorption costing.
D) The relationship between variable costing and absorption costing operating income cannot be determined with the data provideD.

Question

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overhead is allocated to each unit produced, so if inventory levels increase, some of the fixed overhead costs are deferred in inventory, resulting in higher operating income compared to variable costing, where all fixed overhead is expensed in the period incurred.

For the Month Noted,what Was the Relationship Between the Operating