A company that produces a single product had a net operating income of $82,000 using variable costing and a net operating income of $108,790 using absorption costing. Total fixed manufacturing overhead was $54,570 and production was 10,700 units both this year and last year. Last year was the first year of operations. Between the beginning and the end of the year, the inventory level: A) increased by 26,790 units. B) increased by 5,253 units. C) decreased by 5,253 units. D) decreased by 26,790 units.

A company that produces a single product had a net operating income of $82,000 using variable costing and a net operating income of $108,790 using absorption costing. Total fixed manufacturing overhead was $54,570 and production was 10,700 units both this year and last year. Last year was the first year of operations. Between the beginning and the end of the year, the inventory level: A) increased by 26,790 units. B) increased by 5,253 units. C) decreased by 5,253 units. D) decreased by 26,790 units.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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