When there are no beginning or ending balances in Finished Goods Inventory,variable and absorption costing will result in ________.
A) different amounts for ending Work-in-Process Inventory
B) the same operating income
C) different sales revenue
D) different amounts for cost of goods sold

Question

Quizplus · Accepted Answer

When there are no beginning or ending balances in Finished Goods Inventory, the only difference between variable and absorption costing will be in the period expenses. However, the operating income will be the same as both methods will allocate the same amount of direct materials, direct labor, and variable manufacturing overhead to the cost of goods sold. Therefore, the choice is B.

When There Are No Beginning or Ending Balances in Finished