Smith Company Had Net Operating Income of £125,000 Using Variable

Multiple Choice

Smith Company had net operating income of £125,000 using variable costing and £105,000 using absorption costing. Variable production costs were £20 per unit. Total fixed manufacturing overhead was £176,000 and 11,000 units were produced. During the year, the stock level

A) increased by 1,000 units.
B) increased by 1,250 units.
C) decreased by 1,000 units.
D) decreased by 1,250 units.