Use This Information for Timmer Corporation to Answer the Questions

question 166

Multiple Choice

Use this information for Timmer Corporation to answer the questions that follow.

Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 12,000 units of product and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000, and fixed selling and administrative costs were $6,000.

-What would be the difference in Timmer's net income for the year if it used variable costing instead of absorption costing?

• A) no difference
• B) $2,000 greater
• C) $4,000 less
• D) $6,000 less

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Definitions:

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