Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 6 - Variable Costing and Segment Reporting: Tools for Management - Questions - Page 259: 6-9

Answer

Under absorption costing, net operating income can be increased without increasing sales by increasing the number of units produced; when units produced is greater than units sold, inventories increase, as does net operating income.

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