Full costing income can be increased by decreasing production even though the additional inventory items will not be sold during the current period.

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Quizplus · Accepted Answer

Full costing (also known as absorption costing) includes all costs of production (both fixed and variable costs) in the cost of inventory. Decreasing production would lead to fewer units over which fixed costs are spread, potentially increasing the per-unit cost of goods sold and decreasing income, not increasing it. Additionally, producing fewer units does not directly increase income if those units are not sold.

Full Costing Income Can Be Increased by Decreasing Production Even