In Its First Year of Business,Smith,Inc

Multiple Choice

In its first year of business,Smith,Inc.produced and sold 600 units.If Smith uses variable costing,________.

A) its operating income for the period will be higher than under absorption costing
B) its operating income for the period will be lower than under absorption costing
C) its value of ending Finished Goods Inventory reported in the balance sheet will be higher than under absorption costing
D) its operating income will be the same as under absorption costing