When production exceeds sales, a. Ending inventory under variable costing will exceed ending inventory under absorption costing b. Ending inventory under absorption costing will exceed ending inventory under variable costing. c. Ending inventory under absorption costing will be equal to ending inventory under variable costing. d. Ending inventory under absorption costing either exceeds, be equal to, or be less 20 than ending inventory under variable costing.

When production exceeds sales, a. Ending inventory under variable costing will exceed ending inventory under absorption costing b. Ending inventory under absorption costing will exceed ending inventory under variable costing. c. Ending inventory under absorption costing will be equal to ending inventory under variable costing. d. Ending inventory under absorption costing either exceeds, be equal to, or be less 20 than ending inventory under variable costing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Income under absorption costing will be higher than the income under variable costing when the costs of Group of answer choices Beginning inventory exceeds the ending inventory Units manufactured are less than the units sold during the period Units manufactured exceeds the units sold during the period Units manufactured are equal to the units sold during the period
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Production is less than sales. i.e. closing inventory is reducing Absorption costing will produce a lower profit Why?
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