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

Name: When more units are sold than produced,operating income is higher under absorption costing than variable costing.
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Question

Quizplus · Accepted Answer

When more units are sold than produced, operating income is higher under variable costing because absorption costing includes fixed manufacturing overhead in inventory, which reduces cost of goods sold and increases income when inventory decreases.

When More Units Are Sold Than Produced,operating Income Is Higher