Test: CPA Business Environment and Concepts (BEC)

1.

Which of the following statements is correct regarding the difference between the absorption costing and variable costing methods?

When production equals sales, absorption costing income is less than variable costing income.

When production is less than sales, absorption costing income is greater than variable costing income.

When production equals sales, absorption costing income is greater than variable costing income.

When production is greater than sales, absorption costing income is greater than variable costing income.

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