For a period during which the quantity of inventory at the end equals the inventory at the beginning,income from operations reported under variable costing will be smaller than income from operations reported under absorption costing.

Question

Quizplus · Accepted Answer

When the quantity of inventory at the end equals the inventory at the beginning, there is no change in the level of inventory, hence no difference between the two costing methods. The difference in income between the two methods arises only when there is a change in inventory levels between the beginning and end of the period. Therefore, the statement is false.

For a Period During Which the Quantity of Inventory at the End