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Problem 1: During 2020, LIAM Company's variable production costs totaled P 7,500 and its fixed overhead costs totaled P 4,500. The company produced 3,000 units during the year and sold 2,400 units. Assuming no units in the beginning inventory
a. under direct costing, the units in the ending inventory will be costed at P 4 each.
b. the net income under absorption costing for the year will be P 900 lower than the net income under direct costing.
c. the ending inventory under direct costing will be P 900 lower than the ending inventory under absorption costing.
d. none of these
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