Which of the Following Statements Is Not True of Absorption

question 17

Multiple Choice

Which of the following statements is not true of absorption costing?

• A) When sales equal production, absorption costing yields the same profit as variable costing.
• B) When production exceeds sales, absorption costing shows a lower profit than variable costing does.
• C) When sales exceed production, absorption costing shows a lower profit than variable costing does.
• D) Absorption costing allocated both fixed and variable overheads to product cost.

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