The following information pertains to Stark Corporation:

- Absorption costing income would be ____ the variable costing income.
A) $50,000 greater than
B) $70,000 greater than
C) $70,000 less than
D) $50,000 less than

Question

The following information pertains to Stark Corporation:

- Absorption costing income would be ____ the variable costing income.
A) $50,000 greater than 
B) $70,000 greater than 
C) $70,000 less than 
D) $50,000 less than

Quizplus · Accepted Answer

SUPPORTING CALCULATIONS:
There is $50,000 more in fixed cost in ending inventory relative to beginning inventory (zero on hand beginning compared to 5,000 on hand in ending times $10).In addition, production exceeds sales.Therefore, absorption costing income is larger by $50,000.

The Following Information Pertains to Stark Corporation