When Monthly Production Volume Is Constant and Sales Volume Is

question 54

Multiple Choice

When monthly production volume is constant and sales volume is less than production,how will net income determined with variable costing procedures compare to net income determined with absorption costing?

• A)Net income determined with variable costing will always be greater than net income determined using absorption costing.
• B)Net income determined with variable costing will always be less than net income determined using absorption costing.
• C)Net income determined with variable costing will be equal to net income determined using absorption costing.
• D)Net income determined with variable costing will be equal to contribution margin per unit times units sold.

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