If managers report inventories of zero at the start and end of each accounting period, operating incomes under absorption costing and variable costing will be the same.

Question

Quizplus · Accepted Answer

When inventories are zero at both the start and end of the period, there is no difference in the treatment of fixed manufacturing overhead costs between absorption and variable costing, resulting in the same operating income.

If Managers Report Inventories of Zero at the Start and End