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

Question

Quizplus · Accepted Answer

Under both absorption costing and variable costing, if inventories are zero at the beginning and end of the period, all costs (fixed and variable) are expensed in the period they are incurred, resulting in the same operating profit.

If Managers Report Inventories of Zero at the Start and End