In its first year of operations, Bronfren Corporation produced 800,000 sets and sold 780,000 sets of artificial tan lines. What would have happened to net operating income in this first year under the following costing methods if Bronfren had produced 20,000 fewer sets? (Assume that Bronfren has both variable and fixed production costs.)

	Variable costing	Absorption costing
A)	No effect	Increase
B)	Decrease	Increase
C)	Decrease	Decrease
D)	No effect	Decrease

Multiple Choice

Choice D

Choice A

Choice C

Choice B