Operating income using absorption costing will be __________ operating income if using variable costing

ACCOUNTING

Multiple Choice

Morse Corporation incurred fixed manufacturing costs of $7,200 during 20x4. Other information for 20x4 includes:

The budgeted denominator level is 800 units.

Units produced total 1,000 units.

Units sold total 950 units.

Beginning inventory was zero.

The fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.

Operating income using absorption costing will be __________ operating income if using variable costing.

a. $450 higher than

b. $900 higher than

c. $1,350 lower than

d. the same as

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