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S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the manufactured product remained unchanged. The manufacturing costs were
S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the manufactured product remained unchanged. The manufacturing costs were as follows:
Variable | Fixed | |
Unit manufacturing costs of the period | $11.00 | $7.00 |
Unit operating expenses of the period | 3.00 | 2.50 |
Which of the following statements is true?
a.Net income will be the same under both variable and absorption costing.
b.Net income under absorption costing will be $40,000 more than under variable costing.
c.Net income under variable costing will be $45,000 less than net income under absorption costing
d.The difference in net income cannot be determined.
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