Reference no: EM13488553
Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows:
Sales totaled $850,000, variable selling expenses totaled $110,000, and fixed selling and administrative expenses totaled $170,000. There were no units in beginning inventory. Assume that direct labor is a variable cost.
The net operating income for the year under variable costing would be:
A) $28,000 lower than under absorption costing
B) $28,000 higher than under absorption costing
C) $50,000 lower than under absorption costing
D) $50,000 higher than under absorption costing
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