Under variable costing: a. net operating income will tend to move up and down in response to changes in levels of production. b. inventory costs will be lower than under absorption costing. c. net operating income will tend to vary inversely with production changes. d. net operating income will always be higher than under absorption costing.

Principles of Accounting Volume 2
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ISBN:9781947172609
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Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 20MC: Product costs under variable costing are typically: A. higher than under absorption costing B. lower...
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Under variable costing:
a. net operating income will tend to move up and down in response to
changes in levels of production.
b. inventory costs will be lower than under absorption costing.
c. net operating income will tend to vary inversely with production
changes.
d. net operating income will always be higher than under absorption
costing.
Transcribed Image Text:Under variable costing: a. net operating income will tend to move up and down in response to changes in levels of production. b. inventory costs will be lower than under absorption costing. c. net operating income will tend to vary inversely with production changes. d. net operating income will always be higher than under absorption costing.
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