Fallows Manufacturing produces a single product.During 20X9, the company incurred the following costs: Fallows had no units in beginning inventory.During 20X9, 6,000 units were produced and 5,000 units were sold.Which of the following statements is true when comparing net income using absorption versus variable costing?
A)Net income will be $3,500 higher using absorption costing rather than variable costing.
B)Net income will be $3,500 lower using absorption costing rather than variable costing.
C)Net income will be equal for both absorption costing and variable costing.
D)Net income will be $4,200 higher using absorption costing rather than variable costing.
E)Net income will be $4,200 lower using absorption costing rather than variable costing.

Question

Fallows Manufacturing produces a single product.During 20X9, the company incurred the following costs:  Fallows had no units in beginning inventory.During 20X9, 6,000 units were produced and 5,000 units were sold.Which of the following statements is true when comparing net income using absorption versus variable costing?
A)Net income will be $3,500 higher using absorption costing rather than variable costing. 
B)Net income will be $3,500 lower using absorption costing rather than variable costing. 
C)Net income will be equal for both absorption costing and variable costing. 
D)Net income will be $4,200 higher using absorption costing rather than variable costing. 
E)Net income will be $4,200 lower using absorption costing rather than variable costing.

Quizplus · Accepted Answer

The Answer of Fallows Manufacturing produces a single product.During 20X9, the company incurred the following costs:  Fallows had no units in beginning inventory.During 20X9, 6,000 units were produced and 5,000 units were sold.Which of the following statements is true when comparing net income using absorption versus variable costing?
A)Net income will be $3,500 higher using absorption costing rather than variable costing. 
B)Net income will be $3,500 lower using absorption costing rather than variable costing. 
C)Net income will be equal for both absorption costing and variable costing. 
D)Net income will be $4,200 higher using absorption costing rather than variable costing. 
E)Net income will be $4,200 lower using absorption costing rather than variable costing.

Fallows Manufacturing Produces a Single Product