What was the absorption costing net operating income this year?
A)$125,000
B)$72,000
C)$75,000
D)$121,000

Name: What was the absorption costing net operating income this year? A)$125,000 B)$72,000 C)$75,000 D)$121,000
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Question

Quizplus · Accepted Answer

Absorption costing includes all manufacturing costs (fixed and variable) in the cost of a product. The net operating income under absorption costing is typically higher than under variable costing when inventory levels increase, as fixed manufacturing overhead is spread over more units.

What Was the Absorption Costing Net Operating Income This Year