The vice president for Sales of Huber Corporation has received the income statement for November. The statement has been prepared on the variable costing basis and is reproduced below. The firm has just adopted a variable costing system for internal reporting purposes. The controller attached the following notes to the statements:

The unit sales price for November averaged $24.

The standard unit manufacturing costs for the month were

Variable cost

$12

Fixed OH cost

4

Total cost

$16

The unit rate for fixed manufacturing costs is a predetermined rate based upon a normal monthly production of 150,000 units. Production for November was 45,000 units in excess of sales.

The inventory at November 30 consisted of 80,000 units.

Huber Corporation

Income Statement

For the Month of November

($000 omitted)

Sales

$ 2,400

Minus:

Variable standard COGS

(1,200)

Manufacturing margin

$ 1,200

Minus:

Fixed manufacturing costs

at budget

$600

Fixed manufacturing cost

budget variance

0

(600)

Gross margin

$ 600

Minus:

Fixed selling and

administrative costs

(400)

Net income before taxes

$ 200

Question

The difference between variable costing and absorption costing ending inventory is

A.

FOH of $4 unit.

B.

VOH of $13 unit.

C.

FOH of $13 unit.

D.

VOH of $4 unit.