Company A's Inventory Increased 525 Units Over the Prior Year

Multiple Choice

Company A's inventory increased 525 units over the prior year end. Its variable manufacturing costs are $6 per unit and fixed costs for the period were $275,000. During the current year, Company A produced 12,500 units. Absorption costing net income will be:

A) $11,550 higher than direct costing net income.
B) $14,700 higher than direct costing net income.
C) $11,550 lower than direct costing net income.
D) $14,700 lower than direct costing net income.