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Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Units in beginning inventory Units produced Units sold Direct materials
Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Units in beginning inventory Units produced Units sold Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 0 10,000 9,000 $ 40,000 $ 20,000 $ 12,000 $ 25,000 $ 4,500 $ 30,000 Variable selling and administrative expenses Fixed selling and administrative expenses Assume that direct labor is a variable cost. Which costing method, absorption or variable costing, would show a higher operating income for the year and by what amount? Which costing method, absorption or variable costing, would show a higher operating income for the year and by what amount? Multiple Choice Absorption costing net operating income would be higher than variable costing net operating income by $2,500. Variable costing net operating income would be higher than absorption costing net operating income by $2,500. Absorption costing net operating income would be higher than variable costing net operating income by $5,500. Variable costing net operating income would be higher than absorption costing net operating income by $5,500
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