The following information pertains to Nute Corporation: \[\begin{array} { l r } \text { Beginning inventory } & 1,000 \text { units } \\ \text { Ending inventory } & 6,000 \text { units } \\ \text { Direct labour per unit } & \$ 40 \\ \text { Direct materials per unit } & 20 \\ \text { Variable overhead per unit } & 10 \\ \text { Fixed overhead per unit } & 30 \\ \text { Variable selling and administrative costs per unit } & 6 \\ \text { Fixed selling and administrative costs per unit } & 14 \end{array}\] -Refer to the Figure.What is the relationship between absorption costing net income and variable costing net income?

A) Absorption costing net income is $150,000 less. B) Absorption costing net income is $150,000 greater. C) Absorption costing net income is $240,000 less. D) Absorption costing net income is $240,000 greater. A) Absorption costing net income is $150,000 less. B) Absorption costing net income is $150,000 greater. C) Absorption costing net income is $240,000 less. D) Absorption costing net income is $240,000 greater. B

Last year, Ella Company produced 10,000 units and sold 9,000 units at a price of $9 per unit. Costs for last year were as follows: Fixed factory overhead is applied on the basis of expected production. Last year, Ella expected to produce 10,000 units. \[\begin{array} { l r } \text { Direct materials } & \$ 10,000 \\ \text { Direct labour } & 15,000 \\ \text { Variable factory overhead } & 5,000 \\ \text { Fixed factory overhead } & 20,000 \\ \text { Variable selling expense } & 7,200 \\ \text { Fixed selling expense } & 5,000 \\ \text { Fixed administrative expense } & 12,000 \end{array}\] -Refer to the Figure.Assume that beginning inventory was zero.What is the value of ending inventory under variable costing?

A) $2,000 B) $3,000 C) $3,720 D) $5,000 A) $2,000 B) $3,000 C) $3,720 D) $5,000 B

Last year, Ella Company produced 10,000 units and sold 9,000 units at a price of $9 per unit. Costs for last year were as follows: Fixed factory overhead is applied on the basis of expected production. Last year, Ella expected to produce 10,000 units. \[\begin{array} { l r } \text { Direct materials } & \$ 10,000 \\ \text { Direct labour } & 15,000 \\ \text { Variable factory overhead } & 5,000 \\ \text { Fixed factory overhead } & 20,000 \\ \text { Variable selling expense } & 7,200 \\ \text { Fixed selling expense } & 5,000 \\ \text { Fixed administrative expense } & 12,000 \end{array}\] -Refer to the Figure.Assume that beginning inventory was zero.What is the value of ending inventory under absorption costing?

A) $2,000 B) $3,000 C) $3,720 D) $5,000 A) $2,000 B) $3,000 C) $3,720 D) $5,000

The following information pertains to Shark Corporation: \[\begin{array} { l r } \text { Beginning inventory } & 0 \text { units } \\ \text { Ending inventory } & 6,000 \text { units } \\ \text { Direct labour per unit } & \$ 2022 \\ \text { Direct materials per unit } & 1618 \\ \text { Variable overhead per unit } & 48 \\ \text { Fixed overhead per unit } & 1012 \\ \text { Variable selling costs per unit } & 1214 \\ \text { Fixed selling costs per unit } & 1618 \end{array}\] -Refer to the Figure.What is the relationship between absorption-costing net income and variable-costing net income?

A) Absorption-costing net income is $72,000 less. B) Absorption-costing net income is $70,000 less. C) Absorption-costing net income is $72,000 greater. D) Absorption-costing net income is $70,000 greater. A) Absorption-costing net income is $72,000 less. B) Absorption-costing net income is $70,000 less. C) Absorption-costing net income is $72,000 greater. D) Absorption-costing net income is $70,000 greater.