Lindwall Corporation has reported operating profit of $30 000 and a fixed overhead cost rate is $20 per unit for the current accounting period.Under variable costing,if this company produces 100 more units of inventory,then operating profit:
A)is indeterminable.
B)will increase by $2000.
C)will not be affected.
D)will increase by $2000 only if the 100 additional units of inventory are sold.

Question

Quizplus · Accepted Answer

Under variable costing, operating profit is not affected by changes in inventory levels because fixed overhead costs are not allocated to inventory.

Lindwall Corporation Has Reported Operating Profit of $30 000 and a Fixed