When there are zero units in Beginning Finished Goods Inventory and the units produced are more than the units sold, the income will be lower under variable costing than under absorption costing.

A. True
B. False

B. False

Explanation: Absorption cost is the term used to describe the allocation or assigning of costs which includes the variable costs and fixed costs to Individual units of product produced in a given period.

Variable cost is a cost that is associated with the volume of output produced in a given period of time,as the output rises,the variable costs rises etc.

INCOME STATEMENT IS USUALLY LOW USING ABSORPTION COSTING APPROACH AS IT CONSIDERS A WIDER COST THAN VARIABLE COSTING.

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