Which of these is the answer? Thank you

Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in Year 3.

	Per Unit					Per Year
Selling price		$	240
Direct materials		$	85
Direct labor		$	60
Variable manufacturing overhead		$	10
Sales commission		$	11
Fixed manufacturing overhead						$	450,000
Fixed selling and administrative expense						$	250,000

Which of the following choices is true?

Multiple Choice

• In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will be less than variable costing net operating income.

• In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be less than variable costing net operating income. In Year 3, absorption costing net operating income will be greater than variable costing net operating income.

• In Year 1, absorption and variable costing will show the same net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will equal variable costing net operating income.

• In Year 1, absorption costing net operating income will be less than variable costing net operating income. In Year 2, absorption costing net operating income will be greater than variable costing net operating income. In Year 3, absorption costing net operating income will equal variable costing net operating income.