Gloria's Decorating produces and sells a mantel clock for$110perunit.In2015,42,000clockswere produced and36,000were sold.Other information for the year includes:

Variable manufacturingcosts$4.50per unit

Salescommissions$12.50perpart

Fixedmanufacturingcosts$65.00perunit

Administrativeexpenses,allfixed$39.50perunit

Based on CH9,whichstatementis CORRECT?

A.The operating income under Absorption costing is lower than the operating income under Variable costing

B.Managers using Variable costing will manipulate earningsbyproducing more units than sales

C.The difference of Operating income between Absorption costing and Variable costing is $390,000

D.

The "Administrative expenses (fixed)" is used to calculate the Gross margin

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Which statement is WRONG regarding CH3 CVP analysis?

A.Total revenues and total costs are linear in relation to output units.

B.Selling price varies with demand and supply of the product.

C.The difference between total revenues and total variable costs is called contribution margin.

D.The breakeven point is the quantity of output at which total revenues equal total costs.