Lasorsa Corporation manufactures a single product. Variable costing net operating income last year was $86,000 and this year was $98,000. Last year, $4,000 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $27,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income this year?
A)$125,000
B)$72,000
C)$75,000
D)$121,000

Question

Quizplus · Accepted Answer

The absorption costing net operating income this year is $125,000. This is calculated by adding the variable costing net operating income of $98,000 to the fixed manufacturing overhead costs deferred in inventory under absorption costing of $27,000.

Lasorsa Corporation Manufactures a Single Product