The change in variable costing in operating income, is calculated by multiplying contribution margin per unit to ___________?
Correct answer: B. change in quantity of sold units
- A. increase in units sold
- B. change in quantity of sold units
- C. increase in units manufactured
- D. decease in units manufactured
Explanation
Under variable costing, the change in operating income equals contribution margin per unit multiplied by the change in units sold. Units manufactured affect absorption costing through inventory, not variable-costing income.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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