Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations:

	Per Unit					Per Year
Selling price		$	200
Direct materials		$	75
Direct labor		$	50
Variable manufacturing overhead		$	10
Sales commission		$	8
Fixed manufacturing overhead						$	300,000

Using variable costing, what is the companys net operating income?

Multiple Choice

• $213,000

• $223,000

• $233,000

• $243,000

Which of the following choices explains the relationship between the absorption costing net operating income and the variable costing net operating income?

Multiple Choice

• The absorption costing net operating income will be lower than the variable costing net operating income by $30,000.

• The absorption costing net operating income will be lower than the variable costing net operating income by $102,000.

• The absorption costing net operating income will be higher than the variable costing net operating income by $30,000.

• The absorption costing net operating income will be higher than the variable costing net operating income by $102,000.