When production is equal to sales, which of the following is TRUE?
AThe use of absorption costing causes inventory value to increase more than they would though the use of variable costing
BThe use of absorption costing produces a lower net income than the use of variable costing
CThe use of absorption costing produces a higher net income than the use of variable costing
DNo change occurs to inventories for either use absorption costing or variable costing methods
Correct answer
D. No change occurs to inventories for either use absorption costing or variable costing methods
Explanation
No change occurs to inventories for either use absorption costing or variable costing methods is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.