Which of the following is true of a company that uses absorption costing?
A) Net operating income fluctuates directly with changes in sales volume.
B) Fixed production and fixed selling costs are considered to be product costs.
C) Unit product costs can change as a result of changes in the number of units manufactured.
D) Variable selling expenses are included in product costs.

Question

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing costs are spread over the number of units produced, so unit product costs can change with changes in production levels.

Which of the Following Is True of a Company That