Use the Following Information for Questions

question 77

Multiple Choice

Use the following information for questions
Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2018-2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020.
-For the three years 2018-2020,

• A) absorption costing income exceeds variable costing income by $8,000.
• B) absorption costing income equals variable costing income.
• C) variable costing income exceeds absorption costing income by $8,000.
• D) absorption costing income may be greater than, equal to, or less than variable costing income, depending on the situation.

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Definitions:

Common Stock

Equity shares issued by a corporation representing ownership rights, including voting privileges and a share in corporate profits.

Cash Dividend

A cash dividend is a payout of earnings by a corporation to its shareholders in the form of cash.

Financial Statements

Documents that present an organization's financial performance and position, including the income statement, balance sheet, and cash flow statement.

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.