Question

When units produced exceed units sold, net income will generally be ______ costing. Multiple choice question. the same under both absorption costing and variable higher under variable costing than under absorption higher under absorption costing than under variable

Answer 1

higher under absorption costing than under variable costing.

Step-by-step explanation:

Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.

Manufacturing costs can be defined as the overall costs associated with the acquisition of resources such as materials and the cost of converting these raw materials into finished goods. Manufacturing costs include direct labor costs, direct materials cost and manufacturing overhead costs.

In Business management, when the total units of goods produced by a business firm (manufacturer) exceed the total units of goods sold, net income will generally be higher under absorption costing than under variable costing.