Stanczyk Inc

Multiple Choice

Stanczyk Inc. started operations in January 2025. The company produces and sells cabinets for $5,200 each. The following information pertains to the cost and sales of the cabinets each year: The company produced 25 units per year for 2025, 2026, and 2027. The company sold 22 units in 2025, 20 units in 2026, and 26 units in 2027. It reported no volume variances for the three-year period. For 2027,

A) absorption costing operating income exceeded variable costing operating income by $1,000.
B) variable costing operating income exceeded absorption costing operating income by $1,000.
C) the operating income for absorption costing equaled operating income for variable costing.
D) the operating income for absorption costing may be greater than, equal to or less than operating income under variable costing.