When reviewing the income statements of a firm prepared under both absorption costing and variable...
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Accounting
When reviewing the income statements of a firm prepared under both absorption costing and variable costing, which of the following observation would be made?
A. Ending finished goods to be reported under the two methods will be equal.
B. Cost of goods sold will be the same under both methods however, operating income will differ.
C. Gross margin will differ under both methods but operating income will be the same.
D. Ending finished goods will differ between the two methods due to the different handling of fixed production costs
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