A Company with Fixed Manufacturing Costs of $500,000 Produces 100,000

question 15

Multiple Choice

A company with fixed manufacturing costs of $500,000 produces 100,000 units in 2014 and 125,000 units in 2015. The company sells 90,000 units each in both years. Other costs and selling price are unchanged for 2014 and 2015. Assume that there was no beginning inventory in 2014. Which of the following is true?

• A) Variable costing income will be greater in 2014 than in 2015.
• B) The dollar amount of ending inventory will be greater in 2014 than in 2015.
• C) Variable costing income will be the same in 2015 and 2014.
• D) All of these answer choices are correct.

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