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

ACCOUNTING

Multiple Choice

Veach Corporation incurred fixed manufacturing costs of $6,000 during 20x4. Other information for 20x4 includes:

The budgeted denominator level is 1,000 units.

Units produced total 750 units.

Units sold total 600 units.

Beginning inventory was zero.

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


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

a. $2,400 higher

b. $2,400 lower

c. $3,600 higher

d. $900 lower

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