The period-to-period change in operating income under variable costing is driven by unit level of sales, if the fixed costs are constant.

Question

Quizplus · Accepted Answer

Under variable costing, fixed costs are not considered as part of the cost of goods sold, and are instead treated as period expenses. Therefore, changes in operating income are primarily driven by changes in unit level of sales.

The Period-To-Period Change in Operating Income Under Variable Costing Is