If the Number of Units Produced Is More Than the Number

question 7

Multiple Choice

If the number of units produced is more than the number of units sold,which of the following statements is true when comparing operating profit under absorption versus variable costing?

• A)Variable costing will produce a higher operating profit.
• B)Absorption costing will produce a higher operating profit.
• C)Operating profit is the same under both methods.
• D)Sales revenue will be less when absorption costing is used.
• E)None of the answer choices is correct.