Any difference in variable-costing and absorption-costing operating income can be explained by multiplying the fixed-overhead product-costing rate by the change in the total units in the beginning and ending inventories.

Question

Quizplus · Accepted Answer

This is known as the reconciliation method which reconciles the operating income differences between variable costing and absorption costing by using the fixed overhead product-costing rate multiplied by the change in inventory levels.

Any Difference in Variable-Costing and Absorption-Costing Operating Income Can Be