Answered: variable costing

Business

Accounting

variable costing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The president of X Corporation requested you to explain the difference in profit between the variable costing income statement presentation and the absorption method. You would say that: *

a. There is no difference if there is no change in the fixed costs in the beginning and ending inventories.

b. The difference is equal to the fixed cost per unit times the number of units sold.

c. The difference is attributable to the variable costs in the inventory.

d. The difference is attributable to the fixed cost in ending inventory.

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