Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 9 - Inventory Costing and Capacity Analysis - Assignment Material - Questions - Page 358: 9-1

Answer

No. The differences in operating income between variable costing and absorption costing are indeed a result of how fixed manufacturing costs are accounted for. In variable costing, only variable manufacturing costs are considered as inventoriable costs, while absorption costing includes both variable and fixed manufacturing costs in inventory. It's worth noting that fixed marketing and distribution costs remain consistent between the two methods.

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