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12. Using absorption costing, the ending inventory contained 5,000 units at a cost of $10 each. Using variable costing, the ending inventory was stated at
12. Using absorption costing, the ending inventory contained 5,000 units at a cost of $10 each. Using variable costing, the ending inventory was stated at a cost of $7 per unit. There were 0 units in beginning inventory. Net operating income using absorption costing was $100,000. Net operating income using variable was: a. $115,000. b. $85,000. c. $30,000. d. $50,000. 9. In its first year of operations, SOD Inc. produced 26,000 units and sold 22,000 units. In its second year of operations, SOD produced 20,000 units and sold 22,000 units. SOD did not change the cost structure or selling price during the second year of operations. Using absorption costing, net operating income will be: a. lower in the second year. b. higher in the second year. c. the same in both years. 10. In its first year of operations, DOS Inc. produced 20,000 units and sold 15,000 units. In its second year of operations, DOS produced 20,000 units and sold 22,000 units. DOS did not change the cost structure or selling price during the second year of operations. In the second year, net operating income using absorption costing will be: a. the same as net operating income using variable costing. b. more than net operating income using variable costing. c. less than net operating income using variable costing
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