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Umpany manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Selling price per unit Variable

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Umpany manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Selling price per unit Variable costs per unit: Manufacturing: Direct materials Direct labor $ 65 S16 Variable manufacturing overhead Variable selling and administrative expense Fixed costs per year: Fixed manufacturing overhead Selling and administrative expense $2 $12,000 $12,800 Year 2.200 Production (units) Sales (units) 2,000 2,600 11 Which of the following statements is true regarding net operating income in Year 1? A. Net operating income is $2,400 lower under absorption costing than under variable costing B. Net operating income is $2,400 higher under absorption costing than under variable costing. C. Net operating income is $3.000 lower under absorption costing than under variable costing D. Net operating income is $3,000 higher under absorption costing than under variable costing. None of the above E. 12 What is net operating income under absorption costing in Year 2? (Do not round intermediate calculations.) $58,600 $58,818 $63,800 $30,400 D. None of the above E

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