Assuming That the Number of Units Produced Is Greater Than

question 95

Multiple Choice

Assuming that the number of units produced is greater than the number of units sold, which of the following statements is true when comparing net operating income using absorption and variable costing?

• A) Absorption costing will yield a higher net operating income.
• B) Variable costing will yield a higher net operating income.
• C) Net operating income will be the same under both methods.
• D) Sales revenue will be less using absorption costing.