If the number of units produced equals the number of units sold for a manufacturer,both variable costing and absorption costing income statements will yield the same gross margin.

Question

Quizplus · Accepted Answer

When units produced equal units sold, both costing methods yield the same net income, not gross margin. Gross margin is calculated differently in absorption costing, which includes fixed manufacturing overhead in product costs.

If the Number of Units Produced Equals the Number of Units