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

a. will increase by $2,000.

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

c. will not be affected.

d. cannot be determined using only the above information.

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