Under which of the following costing methods would PFA report the highest operating income?
A) Absorption costing
B) Variable costing
C) Throughput costing
D) Income will be equal under all three methods

Question

Quizplus · Accepted Answer

Absorption costing includes fixed manufacturing overhead in product costs, which can defer some expenses to future periods if inventory levels increase, potentially resulting in higher operating income compared to variable or throughput costing.

Under Which of the Following Costing Methods Would PFA Report