Which of the following statements is true? Multiple Choice When the units produced are greater than the units sold, absorption costing income will be greater than variable costing income because absorption costing defers some fixed manufacturing overhead cost in ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement. When the units produced are greater than the units sold, absorption costing income will be less than variable costing income because absorption costing defers some fixed manufacturing overhead cost in ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement. When the units produced are greater than the units sold, absorption costing income will be greater than variable costing income because absorption costing defers some variable manufacturing overhead cost in ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement. When the units produced are greater than the units sold, absorption costing income will be less than variable costing income because absorption costing defers some variable manufacturing overhead cost in ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement. Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead Per Unit Per Year $200 $ 75 $ 50 $ 10 $ 8 $300,000 Which of the following choices explains the relationship between the absorption costing net operating income and the variable costing net operating income? Multiple Choice The absorption costing net operating income will be lower than the variable costing net operating income by $30,000. The absorption costing net operating income will be lower than the variable costing net operating income by $102,000. () The absorption costing net operating income will be higher than the variable costing net operating income by $30,000. The absorption costing net operating income will be higher than the variable costing net operating income by $102,000. Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Per Unit Per Year $200 Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead $ 75 $ 50 $ 10 $ 8 $300,000 Using absorption costing, what is the company's gross margin? Multiple Choice $273,000 $243,000 O $315,000 $285,000
