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Acme Company produces and sells widgets. Acme's per - unit selling price, per - unit variabie costs and total fixed costs are constant from year
Acme Company produces and sells widgets. Acme's perunit selling price, perunit variabie costs and total fixed costs are constant from yeartoyear. Acme's unit sales are also constant from yeartoyear, but the number of units that Acme produces fluctuates from yeartoyear. Acme's annual operating income computed using variable costing will:
Fluctuate in direct proportion to changes in production.
Fluctuate inversely with changes in production.
Remain constant.
Always be greater than its annual operating income computed using absorption costing.
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