Which of the following would be true of variable costing if used when the number
ID: 2572458 • Letter: W
Question
Which of the following would be true of variable costing if used when the number of units produced exceeds the number of units sold?
The net income will be lower under the absorption costing.
The net income will be higher under the absorption costing.
The net income may be higher or lower depending on other factors.
The net incomes on both the absorption costing and the variable costing will be the same.
a.The net income will be lower under the absorption costing.
b.The net income will be higher under the absorption costing.
c.The net income may be higher or lower depending on other factors.
d.The net incomes on both the absorption costing and the variable costing will be the same.
Explanation / Answer
Answer to Question
When the number of units produced exceeds the number of units, if variable costing is used, then,
b) The net income will be higher under the absorption costing
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