When sales are more than production, operating income will be lower under absorption costing than...
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Accounting
When sales are more than production, operating income will be lower under absorption costing than under variable costing. If we assume no ending inventory balances, which of the following gives the best justification of the above statement?
A. All costs incurred have been accounted for as expenses
B. Fixed manufacturing costs have not been used in calculating operating profits
C. Some of the fixed manufacturing overhead is still in the ending Finished Goods Inventory
D. Units in beginning Finished Goods Inventory have manufacturing fixed costs allocated to them
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