The Company Is Considering Using Either Super-Variable Costing or a Variable

Multiple Choice

The company is considering using either super-variable costing or a variable costing system that assigns $28 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A) Super-variable costing net operating income exceeds variable costing net operating income by $168,000.
B) Super-variable costing net operating income exceeds variable costing net operating income by $420,000.
C) Variable costing net operating income exceeds super-variable costing net operating income by $420,000.
D) Variable costing net operating income exceeds super-variable costing net operating income by $168,000.