Hein Corp. budgeted fixed manufacturing costs of $6,000 during 2022. Other information for 2022 includes:

The budgeted denominator level is 1,000 units.

Units produced total = 750 Units.

Units sold total = 600 Units.

Beginning inventory = 0 Units

The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.

Question: What is the difference between Operating Income utilizing Absorption Costing against Variable Costing.

Choices:

A. Absorption Costing will be $1,500 Higher > Variable Costing

B. Absorption Costing will be $1,200 Lower < Variable Costing

C. Absorption Costing will be $2,400 Lower < Variable Costing

D. Absorption Costing will be $900 Higher > Variable Costing