The income under variable costing will always be the same as the income under absorption costing.

Question

Quizplus · Accepted Answer

The income under variable costing and absorption costing can differ because they treat fixed manufacturing overhead costs differently. Under variable costing, fixed manufacturing overhead costs are treated as period expenses whereas under absorption costing, they are allocated to the units produced, resulting in different amounts of net income.

The Income Under Variable Costing Will Always Be the Same