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: 6-6

Answer

The two methods present will have the same net operating income as long as the unit produced has the same value as the units sold. The fixed manufacturing overhead cost, which is incurred, will flow through the income statement under both presented methods.

Work Step by Step

As long as units sold = units produced there will be no difference in terms of the method we will use as both of them will give the same net operating income value.
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