Assuming no other changes, operating income will be the same under both the variable and absorption costing methods when the number of units manufactured equals the number of units sold.

Question

Quizplus · Accepted Answer

When the number of units manufactured equals the number of units sold, there is no change in inventory levels and thus no difference between the variable and absorption costing methods in terms of the allocation of fixed manufacturing overhead costs. Therefore, operating income will be the same under both methods.

Assuming No Other Changes, Operating Income Will Be the Same