ACCT2320 - CH.8

Used only for internal reporting

• Variable costing

• Absorption costinng

All variable and fixed manu costs are product costs

• Variable costing

• Absorption costinng

Required for external reporting

• Variable costing

• Absorption costinng

Only variable manu costs are product costs

• Variable costing

• Absorption costinng

Production levels have no impact cost of inventory and COGS

• Variable costing

• Absorption costinng

Production levels will impact cost of inventory and COGS

• Variable costing

• Absorption costinng

Operating income can be "manipulated" by adjusting production

• Variable costing

• Absorption costinng

Operating income cannot be "manipulated" by adjusting production levels

• Variable costing

• Absorption costinng

Net under absorption costing vs. variable costing:

_ when units produces exceed units sold

• higher

• lower

Net under absorption costing vs. variable costing:

_ when units produces are less than units sold

• higher

• lower