In its first year of business,Greenlam Inc.produced and sold 600 units.If Greenlam uses variable costing,________.
A)its operating profit for the period will be higher than absorption costing
B)its operating profit for the period will be lower than absorption costing
C)its value of ending inventory reported in the balance sheet will be higher than absorption costing
D)its operating profit will be the same under absorption costing

Question

Quizplus · Accepted Answer

In the first year, with no beginning inventory and all units produced being sold, operating profit will be the same under both variable and absorption costing.

In Its First Year of Business,Greenlam Inc