MANAGEMENT ACCOUNTING If production is greater than sales, absorption costing net income will be greater than variable costing net income. Absorption costing net income is higher because some of the fixed manufacturing overhead costs will be deferred in the inventory account until the products are sold.

1. Explain how absorption costing is used to calculate the cost of goods manufactured. Please give example.

2. Explain how variable costing system costing is used to calculate the cost of goods manufactured. Please give example.

Can you list the resources used please. -investpedia and wikipedia are not sources accepted. thank you