What will be the result if the unit level of inventory increases during an accounting period?
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When the unit level of inventory increases during an accounting period, more fixed manufacturing overhead costs are allocated to the ending inventory under absorption costing. This means that less of these costs are expensed in the current period compared to variable costing, where all fixed manufacturing overhead costs are expensed in the period they are incurred. As a result, operating profit will be higher under absorption costing than under variable costing when inventory levels increase.

What Will Be the Result If the Unit Level of Inventory