In the Month of December the Valhalla Company Produced 28,000

Multiple Choice

In the month of December the Valhalla Company produced 28,000 units and sold 30,000 units. Under absorption costing:

A) Fixed manufacturing costs will be "released" from inventory and therefore net operating income will be lower than it would under variable costing
B) Fixed selling & administrative costs will be "released" from inventory and therefore net operating income will be lower than it would under variable costing
C) Fixed manufacturing costs will be included in inventory instead of on the income statement and therefore net operating income will be higher than it would under variable costing
D) All fixed costs will be "released" from inventory and therefore net operating income will be lower than it would under variable costing