A Company That Produces a Single Product Had a Net

Multiple Choice

A company that produces a single product had a net operating income of $65,000 using variable costing and a net operating income of $95,000 using absorption costing. Total fixed manufacturing overhead was $60,000 and production was 10,000 units. This year was the first year of operations. Between the beginning and the end of the year, the inventory level:

A) decreased by 5,000 units
B) increased by 5,000 units
C) decreased by 30,000 units
D) increased by 30,000 units