The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $24.00 $10.00 Unit operating expenses of the period 8.00 3.00 The effect on operating income if variable costing is used rather than absorption costing would be a a.$50,000 increase b.$50,000 decrease c.$65,000 decrease d.$65,000 increase
The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $24.00 $10.00 Unit operating expenses of the period 8.00 3.00 The effect on operating income if variable costing is used rather than absorption costing would be a a.$50,000 increase b.$50,000 decrease c.$65,000 decrease d.$65,000 increase
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available:
| Variable | Fixed | |
| Unit |
$24.00 | $10.00 |
| Unit operating expenses of the period | 8.00 | 3.00 |
The effect on operating income if variable costing is used rather than absorption costing would be a
a.$50,000 increase
b.$50,000 decrease
c.$65,000 decrease
d.$65,000 increase
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