Question 9

When comparing absorption and variable costing which of the following isfalse?

a) The difference between absorption costing and variable costing is the treatment of fixed manufacturing overhead.

b) Selling and administrative costs are period costs under both absorption and variable costing.

c) Companies that use just-in-time processing techniques will have significant differences between absorption and variable-costing net income.

d) Absorption costing will show a higher net income than variable costing whenever there are more units produced than sold.