Multiple Choice
Truman Corporation
The following information has been extracted from the financial records of Truman Corporation for its first year of operations:
| Units produced | 10,000 |
| Units sold | 7,000 |
| Variable costs per unit: | |
| Direct material | $8 |
| Direct labor | 9 |
| Manufacturing overhead | 3 |
| SG&A | 4 |
| Fixed costs: | |
| Manufacturing overhead | $70,000 |
| SG&A | 30,000 |
Refer to Truman Corporation.Based on absorption costing,Truman Corporation's income in its first year of operations will be
A) $21,000 higher than it would be under variable costing.
B) $70,000 higher than it would be under variable costing.
C) $30,000 higher than it would be under variable costing.
D) higher than it would be under variable costing,but the exact difference cannot be determined from the information given.
Correct Answer:
Verified
Correct Answer:
Verified
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