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Richardson Company The Following Information Is Available for Richardson Company for Its

Question 56

Multiple Choice

Richardson Company
The following information is available for Richardson Company for its first year of operations:

Sales in units	5,000
Production in units	8,000
Manufacturing costs:
Direct labor	$3 per unit
Direct material	$5 per unit
Variable overhead	$1 per unit
Fixed overhead	$100,000
Net income (absorption method)	$30,000
Sales price per unit	$40

Refer to Richardson Company.If Richardson Company had used variable costing,what amount of income before income taxes would it have reported?

A) $30,000
B) ($7,500)
C) $67,500
D) cannot be determined from the information given