At the end of the accounting period Bumsted Corporation reports operating income of $30,000 and the fixed overhead cost rate is $20 per unit

ACCOUNTING

Multiple Choice

At the end of the accounting period Bumsted Corporation reports operating income of $30,000 and the fixed overhead cost rate is $20 per unit. Under variable costing, if this company produces 100 more units of inventory, then operating income

a. will increase by $2,000.

b. will increase by $2,000 only if the 100 additional units of inventory are sold.

c. will not be affected.

d. cannot be determined using only the above information

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