Under absorption costing,operating profit can be ________.
A)increased by increasing production without increasing sales
B)decreased by increasing production without decreasing sales
C)decreased by increasing the level of ending Finished Goods Inventory
D)increased by decreasing sales and keeping production equal to sales

Question

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overhead is allocated to each unit produced. By increasing production, more fixed costs are spread over more units, reducing the cost per unit and increasing operating profit, even if sales do not increase.

Under Absorption Costing,operating Profit Can Be ________