Harold Corporation Just Started Business in January 2012

Multiple Choice

Harold Corporation just started business in January 2012. They had no beginning inventories. During 2012 they manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000 and fixed selling and administrative costs were $6,000. What would be the difference in Harold Corporation's Net income for 2012 if they used variable costing instead of absorption costing?

A) No difference
B) $2,000 greater
C) $4,000 less
D) $6,000 less