Under variable costing,managers can increase operating profit by simply producing more inventory at the end of the accounting period even if that inventory never gets sold.

Question

Quizplus · Accepted Answer

Under variable costing, only variable production costs are included in product costs. Fixed manufacturing costs are expensed in the period incurred, so producing more inventory does not defer these costs and does not increase operating profit.

Under Variable Costing,managers Can Increase Operating Profit by Simply Producing