Profits move in the same direction as sales when variable costing is used if selling prices, the sales mix, and the cost structure remain the same.

Name: Profits move in the same direction as sales when variable costing is used if selling prices, the sales mix, and the cost structure remain the same.
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Question

Quizplus · Accepted Answer

In variable costing, the cost of goods sold is directly linked to sales, so if the selling prices, sales mix, and cost structure remain the same, profits will move in the same direction as sales.

Profits Move in the Same Direction as Sales When Variable