Question 1
The only difference between absorption costing and variable costing is the treatment of
◦ fixed overhead costs.
◦ all fixed costs.
◦ variable overhead costs.
◦ all variable costs.
Question 2
When the units produced equal the units sold, operating income
◦ is the same under absorption costing and variable costing.
◦ is lower under absorption costing than under variable costing.
◦ is higher under absorption costing than under variable costing.
◦ cannot be determined with the information given.