Variable Costing Net Income Does Not Equal Absorption Costing Net

question 53

Multiple Choice

Variable costing net income does not equal absorption costing net income due to ________.

• A) variable selling costs
• B) variable manufacturing overhead costs
• C) fixed manufacturing overhead costs
• D) variable and fixed manufacturing overhead costs

---

Definitions:

Normal Credit Balance

The expected or usual balance of a specific account, where liability, equity, and revenue accounts typically have credit balances.

Perpetual Inventory System

An inventory management method where inventory quantities and costs are updated continuously with each sale or purchase.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Credit To Inventory

An accounting entry that increases the inventory asset account due to purchases on credit.