The Following Information Pertains to Stark Corporation -Refer to the Figure

question 99

Multiple Choice

The following information pertains to Stark Corporation:
$\begin{array}{lr}\text { Beginning inventory } & 0 \text { units } \\\text { Ending inventory } & 5,000 \text { units } \\\text { Direct labour per unit } & \$ 20 \\\text { Direct materials per unit } & 16 \\\text { Variable overhead per unit } & 4 \\\text { Fixed overhead per unit } & 10 \\\text { Variable selling costs per unit } & 12 \\\text { Fixed selling costs per unit } & 16\end{array}$
-Refer to the figure.How would absorption costing net income compare to the variable costing net income?

• A)Absorption costing net income would be $50,000 greater than the variable costing net income.
• B)Absorption costing net income would be $50,000 less than the variable costing net income.
• C)Absorption costing net income would be $70,000 greater than the variable costing net income.
• D)Absorption costing net income would be $70,000 less than the variable costing net income.

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Definitions:

IT and Internet

The study and application of systems for storing, retrieving, and sending information through computers and telecommunication devices.

Bureaucracy

A system of government or business that is characterized by fixed rules, a hierarchy of authority, and a complex structure of administration and control.

Worker Empowerment

Strategies and practices that give employees authority and power to make decisions and contribute to the company's success.

Vertical Structure

An organizational hierarchy where authority and responsibility flow from top management down through various levels of management.