B. If finished goods inventory increases, absorption costing results in higher income.
You are watching: Which of the following statements is true regarding absorption costing
C. Variable manufacturing costs are lower under variable costing.
D. Gross margins are the same under both costing methods.
B. If finished goods inventory increases, absorption costing results in higher income. The reason is that some of the fixed production overhead incurred during the period will be carried forward in cost finished goods inventory ( which reduces cost of sales) to be set against sales revenue in the following period instead of being written off in full against profit in the period.
See more: Fafsa Total Current Balance Of Cash Savings And Checking Accounts
muzic-ivan.info.com is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. Every day, thousands of new job vacancies are listed on the award-winning platform from the region"s top employers.