Which of the following conditions would cause absorption-costing income to be lower than variable-costing income?
A) Units sold exceeded units produced.
B) Units sold equaled units produced.
C) Units sold were less than units produced.
D) Sales prices decreased.
E) Selling expenses increased.

Question

Quizplus · Accepted Answer

When units sold exceed units produced, absorption costing will show lower income because fixed manufacturing overhead costs deferred in inventory under absorption costing are released to cost of goods sold, reducing income.

Which of the Following Conditions Would Cause Absorption-Costing Income to Be