When units produced are less than units sold,income under absorption costing is higher than income under variable costing.

Question

Quizplus · Accepted Answer

When units produced are less than units sold, income under absorption costing is lower than income under variable costing because fixed manufacturing overhead costs from previous periods will be included in the cost of goods sold under absorption costing, reducing the income.

When Units Produced Are Less Than Units Sold,income Under Absorption