Carr Company Produces a Single Product

Multiple Choice

Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows:
-The net operating income for the year under variable costing would be:

A) $28,000 lower than under absorption costing
B) $28,000 higher than under absorption costing
C) $50,000 lower than under absorption costing
D) $50,000 higher than under absorption costing