Other things being equal, income computed by the variable costing method will exceed that computed by the full costing method if:

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Quizplus · Accepted Answer

Under variable costing method, only variable manufacturing costs are treated as inventory costs and fixed manufacturing costs are expensed in the period incurred. Therefore, when units sold exceed units produced, all fixed manufacturing costs are expensed in the period and do not become inventory costs, resulting in higher income under the variable costing method compared to the full costing method.

Other Things Being Equal, Income Computed by the Variable Costing