(CGA) How does the accounting treatment of selling and administration costs differ between absorption and variable costing if more units are produced than are sold?
A) The variable portion is added to the cost of ending inventory based on a pro rata portion of units produced to those sold
B) The fixed portion is added to the costs of ending inventory based on a pro rata portion of units produced to those sold
C) There is no difference in the treatment
D) Both fixed and variable portions are added to the cost of ending inventory based on a pro rata portion of units produced to those sold
Correct Answer:
Verified
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