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The Following Data Were Provided by Green Enterprises for the Most

Question 65

Multiple Choice

The following data were provided by Green Enterprises for the most recent period:
 Units in beginning inventory 0 Units produced 8,000 Units sold 6,000 Variable costs per unit:  Manufacturing $15 Selling and administrative $5 Fixed costs in total  Manufacturing $24,000 Selling and administrative $16,000\begin{array} { | l | r | } \hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 8,000 \\\hline \text { Units sold } & 6,000 \\\hline \text { Variable costs per unit: } & \\\hline \text { Manufacturing } & \$ 15 \\ \hline \text { Selling and administrative } &\$ 5 \\\hline \text { Fixed costs in total } & \\\hline \text { Manufacturing } & \$ 24,000\\\hline \text { Selling and administrative } & \$ 16,000\\\hline\end{array}

-For the period noted,which of the following statements best describes the relationship between the operating income under absorption costing and under variable costing?


A) Absorption costing operating income would be higher than the operating income under variable costing.
B) Absorption costing operating income would be lower than the operating income under variable costing.
C) Absorption costing operating income would be the same as the operating income under variable costing.
D) The relationship between absorption costing operating income and variable costing operating income cannot be determined without additional information.

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