If the Unit Level of Inventory Increases During an Accounting

question 138

Multiple Choice

If the unit level of inventory increases during an accounting period, then ________.

• A) less operating income will be reported under absorption costing than variable costing
• B) more operating income will be reported under absorption costing than variable costing
• C) operating income will be the same under absorption costing and variable costing
• D) the exact effect on operating income cannot be determined

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