When inventory levels decrease absorption costing will result in a higher operating income than direct costing.
AASCB: Analytic

Name: When inventory levels decrease absorption costing will result in a higher operating income than direct costing. AASCB: Analytic
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When inventory levels decrease, absorption costing will result in a lower operating income than direct costing because fixed manufacturing overhead costs are released from inventory and expensed, reducing income.

When Inventory Levels Decrease Absorption Costing Will Result in a Higher