Income when there is zero beginning inventory and all inventory units produced are sold. Group of answer choices Will be the same under both variable and absorption costing Will be higher than gross margin under variable costing Will be higher under variable costing than absorption costing Will be lower than administrative costs under absorption costing Will be lower under variable costing than absorption costing

The correct answer is will be the same for both absorption costing and variable costing .

Explanation:

One of the fundamental categories of cost systems is made up of those methods that highlight the treatment of fixed costs when valuing products. This category includes absorption costing and variable costing.

The absorption or total costing theory contemplates that the determination of the cost of production of goods, services or activities is made up solely of direct or operating costs and indirect costs of processes, cost centers or areas of productive responsibility. According to this theory, production costs -direct and indirect- affect the profits of the period depending solely on the quantity of goods or products produced and sold, or services rendered and invoiced during the period.

The theory of direct, variable or marginal costing initially considers that the cost of production of goods or services should only assume the direct costs caused in the production of the same, and additionally contemplates that the cost of sales of the good or service must incorporate all direct costs of distribution, marketing, market and / or sales fully identified, in order to determine the total direct cost of the economic good, which allows obtaining a more reasonable profit margin per product or service than that calculated under the absorption costing theory .

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