Cutterski Corporation Manufactures a Propeller

Multiple Choice

Cutterski Corporation manufactures a propeller.Shown below is Cutterski's cost structure: In its first year of operations, Cutterski produced 60, 000 propellers but only sold 54, 000. Which costing method (variable or absorption) will generate a higher net operating income in Cutterski's first year of operations and by how much?

A) variable by $81, 000
B) variable by $108, 000
C) absorption by $81, 000
D) absorption by $108, 000