For a period during which the quantity of product manufactured exceeds the quantity sold, operating income reported under absorption costing will be larger than operating income reported under variable costing. True False

Question

Blaine Ali

Business

18 August, 01:34

For a period during which the quantity of product manufactured exceeds the quantity sold, operating income reported under absorption costing will be larger than operating income reported under variable costing. True False

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Addisyn Henry · Answer 1

Answer:True

Explanation: Absorption cost is includes all cost and fixed cost that is related to production. Absorption cost attributable to the cost of goods sold and those attributable to inventory.

variable costing only includes the variable costs directly incurred during production. Variable cost enable company to compare profit or loss of manufacturing one product over another.