In 2021, Company ABS had a variable manufacturing cost of $14,400 and a fixed manufacturing overhead amount of $4,000. The company had sold 4,800 units representing 60% of the units manufactured. The initial stock of finished products was nil. Which of the following statements would be true?

Question 5 options:

a- The net profit under the full cost method would be $1,600 less than the net profit under the variable cost method.

b- Under the variable cost method, the cost of ending inventory would be valued at $7,360

c- No answer fits

d- The net profit under the full cost method would be $5,760 higher than the net profit under the variable cost method.

e- The ending inventory under the variable cost method would be $1,600 less than the ending inventory under the full cost method.