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Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units
Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in Year 3. Per Year Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead Fixed selling and administrative expense Per Unit $240 $ 85 $ 60 S 10 $ 11 $ 450,000 $ 250,000 Which of the following choices is true? Multiple Choice In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be less than variable costing net operating income. In Year 3, absorption costing net operating income will be greater than variable costing net operating income. In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will equal variable costing net operating income. In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will be less than variable costing net operating income. In Year 1, absorption costing net operating income will be less than variable costing net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will equal variable costing net operating income
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