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The net profit of a company for a year on a variable costing basis is $85,000 and on an absorption costing basis, the net profit is $73,000. Fixed manufacturing overhead costs per unit were the same in both the prior and current year ($1.20 per unit). What was the change in inventory over the year? a. Decrease of 10,000 units b. Increase of 10,000 units c. Increase of 12,000 units d. Decrease of 8,000 units

The net profit of a company for a year on a variable costing basis is $85,000 and on an absorption costing basis, the net profit is $73,000. Fixed manufacturing overhead costs per unit were the same in both the prior and current year ($1.20 per unit). What was the change in inventory over the year? a. Decrease of 10,000 units b. Increase of 10,000 units c. Increase of 12,000 units d. Decrease of 8,000 units

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 net profit of a company for a year on a variable costing basis is $85,000 and on an absorption costing basis, the net profit is $73,000. Fixed manufacturing overhead costs per unit were the same in both the prior and current year ($1.20 per unit). What was the change in inventory over the year? a. Decrease of 10,000 units b. Increase of 10,000 units c. Increase of 12,000 units d. Decrease of 8,000 units
Transcribed Image Text:The net profit of a company for a year on a variable costing basis is $85,000 and on an absorption costing basis, the net profit is $73,000. Fixed manufacturing overhead costs per unit were the same in both the prior and current year ($1.20 per unit). What was the change in inventory over the year? a. Decrease of 10,000 units b. Increase of 10,000 units c. Increase of 12,000 units d. Decrease of 8,000 units
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