Absorption-costing income is not affected by differences in expected volume and actual volume.

Question

Quizplus · Accepted Answer

Absorption costing income is affected by differences in expected volume and actual volume because it includes fixed manufacturing overhead costs which are allocated to units produced based on expected volume. If actual volume differs from expected volume, the allocated fixed overhead costs may not accurately reflect the actual overhead costs incurred, resulting in a potentially misleading income statement.

Absorption-Costing Income Is Not Affected by Differences in Expected Volume