Use the Following Information for the Next 3 Questions

question 118

Multiple Choice

Use the following information for the next 3 questions.
Exeter Mfg. Co. introduced a new mass-produced specialty product early in the year. Production and sales of this product for the first four months are as follows: The firm's budgeted fixed overhead is $200,000, and budgeted output is 1,000 units per month. The volume variance, if any, is carried forward month-by-month and closed at the end of the year. When 1,000 units are produced and sold, expected monthly operating income is $40,000.
-In which month(s) was variable costing income lower than absorption costing income?

• A) 4
• B) 1, 2, and 3
• C) 2 and 3
• D) 3 and 4

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