Question 3 (2 points) One advantage of absorption costing is Companies can avoid using estimates in product costing. Companies report all of the costs of getting inventory ready for sale to customers in a single place on the income statement. Companies always report higher net operating income. Companies can readily use the absorption costing information in cost-volume- profit analysis. Question 6 (2 points) Which of the following costs at a manufacturing company would be treated as a product cost under both absorption costing and variable costing? Variable selling and administrative expense only. Both variable manufacturing overhead and variable selling and administrative expense. Variable manufacturing overhead only Neither variable manufacturing overhead and variable selling and administrative expense. Question 7 (2 points) ABC Company has more units in inventory at the end of the year than at the beginning of the year. Assume that ABC Company has the same variable and fixed product costs each year. Which of the following is true? Net operating income under absorption costing is greater than net operating income under variable costing Net operating income under absorption costing is less than net operating income under variable costing Net operating income under absorption costing is the same as than net operating income under variable costing It is not predictable whether net operating income under absorption costing is greater than or less than net operating income under variable costing. The following data describes company operations for 20x7. There is no beginning inventory. Units manufactured 3,000 units Units sold 2,400 units 3 Per Unit Total $48,000 $33,000 $9,600. $21,000 Variable production costs Fixed manufacturing overhead Variable selling administrative expenses Fixed selling and administration costs Selling price per unit 6 $44 9 What is the difference in net operating income between absorption costing and variable costing? 12 $11,850 15 $33,000 $16,200 $6,600