When all the units produced are sold,the operating income calculated under absorption costing is higher when compared to the operating income calculated under variable costing.Assume that there is no beginning Finished Goods Inventory.

Question

Quizplus · Accepted Answer

When all units produced are sold and there is no beginning inventory, the operating income under absorption costing and variable costing will be the same because the fixed manufacturing overhead costs are fully allocated to the cost of goods sold in both costing methods.

When All the Units Produced Are Sold,the Operating Income Calculated