If the number of units produced is more than the number of u

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

Solution

Answer to the question is

Absorption costing will produce a higher operating profit because units in year end inventory include amount of fixed maufacturing overhead while in variable costing it is not included.

If the number of units produced is more than the number of units sold, which of the following statements is true when comparing overhead costs under absorption

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