ECONOMICS

Detailed explanation-1: -When a company sells the same quantity of products produced during the period, the resulting net income will be identical whether absorption costing or variable costing is used.

Detailed explanation-2: -Net profit will be higher under Absorption Costing when ending inventory more than beginning inventory. The value of beginning inventory under Marginal Costing is higher than Absorption Costing. When inventory levels are increase, profit under absorption costing is higher than marginal costing.

Detailed explanation-3: -The only difference between absorption costing and variable costing is in the treatment of fixed manufacturing overhead. Using absorption costing, fixed manufacturing overhead is reported as a product cost. Using variable costing, fixed manufacturing overhead is reported as a period cost.

Detailed explanation-4: -Answer and Explanation: Variable costing includes the total variable direct cost associated with the production but does not consider the direct fixed cost and overheads. In contrast, absorption costing includes all the direct costs which are associated with the production process.