Thompson Company is required to follow generally accepted accounting principles. They use absorption costing for financial statements provided to the SEC. However, production managers prefer variable costing for internal decision making and planning. Thompson Company sold all the products they manufactured in year 1. In year 2, however, they manufactured 500 units more than they sold. How were the income statements provided to the SEC different than the income statements provided to the production managers for both years? 

Answer rating: 100% (QA)

The difference between absorption costing and variable costing lies in how fixed manufacturing overhead costs are treated In absorption costing fixed ... View the full answer