Which of the following statements about profit measurement under absorption and marginal costing is not true (assuming that unit variable costs and fixed costs are constant)? O A. If inventory levels increase then profits measured using absorption costing will be higher than profits measured using marginal costing. OB. If inventory levels decrease then profits measured using marginal costing will be higher than profits measured using absorption costing. OC. Profits measured using absorption costing will be either lower or higher than profits measured using marginal costing. O D. Profits measured using absorption costing may be the same as, or lower than, or higher than profits measured using marginal costing.

Which of the following statements about profit measurement under absorption and marginal costing is not true (assuming that unit variable costs and fixed costs are constant)? O A. If inventory levels increase then profits measured using absorption costing will be higher than profits measured using marginal costing. OB. If inventory levels decrease then profits measured using marginal costing will be higher than profits measured using absorption costing. OC. Profits measured using absorption costing will be either lower or higher than profits measured using marginal costing. O D. Profits measured using absorption costing may be the same as, or lower than, or higher than profits measured using marginal costing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Which of the following statements about profit measurement under absorption and marginal costing is not true
(assuming that unit variable costs and fixed costs are constant)?
O A. If inventory levels increase then profits measured using absorption costing will be higher than profits
measured using marginal costing.
O B. If inventory levels decrease then profits measured using marginal costing will be higher than profits measured
using absorption costing.
OC. Profits measured using absorption costing will be either lower or higher than profits measured using marginal
costing.
O D. Profits measured using absorption costing may be the same as, or lower than, or higher than profits
measured using marginal costing.

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