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The level of inventory of a manufactured product has increased by 7,871 units during a period. The following data are also available: Variable Fixed $12.00 $7.00 1.00 4.00 Unit manufacturing costs of the period Unit operating expenses of the period The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $55,097 increase Ob. $55,097 decrease Oc. $86,581 increase Od. $86,581 decrease

The level of inventory of a manufactured product has increased by 7,871 units during a period. The following data are also available: Variable Fixed $12.00 $7.00 1.00 4.00 Unit manufacturing costs of the period Unit operating expenses of the period The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $55,097 increase Ob. $55,097 decrease Oc. $86,581 increase Od. $86,581 decrease

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
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 7,871 units during a period. The following data are also available: | | Variable | Fixed | |-------------------------|----------|--------| | Unit manufacturing costs of the period | $12.00 | $7.00 | | Unit operating expenses of the period | 1.00 | 4.00 | The effect on operating income if variable costing is used rather than absorption costing would be a(n): - a. $55,097 increase - b. $55,097 decrease - c. $86,581 increase - d. $86,581 decrease
Transcribed Image Text:The level of inventory of a manufactured product has increased by 7,871 units during a period. The following data are also available: | | Variable | Fixed | |-------------------------|----------|--------| | Unit manufacturing costs of the period | $12.00 | $7.00 | | Unit operating expenses of the period | 1.00 | 4.00 | The effect on operating income if variable costing is used rather than absorption costing would be a(n): - a. $55,097 increase - b. $55,097 decrease - c. $86,581 increase - d. $86,581 decrease
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