21. A company manufactures 50,000 units of a product and sells 40,000 units. Total manufacturing cost per unit is $50 (variable manufacturing cost $10, fixed manufacturing cost $40). Assuming no beginning inventory, what is the effect on net income if absorption costing is used instead of variable costing?

A.

Net income is the same.

B.

Net income is $400,000 higher.

C.

Net income is $200,000 higher.

D.

Net income is $400,000 lower.