Reference no: EM132621119

Production costs for 10,000 units sold at $45 per unit:

Direct materials                                          $20,000

Direct labor                                               $80,000

Variable overhead                                      $60,000

Fixed overhead                                        $90,000

Variable selling and administrative costs     $40,000

Fixed selling and administrative costs         $80,000

Total costs                                           $370,000

Problem 1: What is the difference in net income between absorption-costing and variable-costing income statements, assuming there is no ending or beginning inventory?

Option 1: $80,000

Option 2: $170,000

Option 3: $90,000

Option 4: No difference