When there is no beginning Finished Goods Inventory and all the goods that are produced are sold,the operating income ________.
A) will be higher under absorption costing than variable costing
B) will be lower under absorption costing than variable costing
C) will be higher than the gross profit under variable costing
D) will be the same for both absorption costing and variable costing

Question

Quizplus · Accepted Answer

When there is no beginning Finished Goods Inventory and all the goods produced are sold, the operating income will be the same under both absorption costing and variable costing because all fixed manufacturing overhead costs would have been allocated to the cost of goods sold in both costing methods.

When There Is No Beginning Finished Goods Inventory and All