Craft Corporation Produces a Single Product

Multiple Choice

Craft Corporation produces a single product. Last year, the company had a net operating income of $80,000 using absorption costing and $74,500 using variable costing. The fixed manufacturing overhead cost was $5 per unit. There were no beginning inventories. If 21,500 units were produced last year, then sales last year were:

A) 16,000 units
B) 20,400 units
C) 22,600 units
D) 27,000 units