Vision Tester, Inc Given This Information, Which of the Following Is True?
A)

question 67

Multiple Choice

Vision Tester, Inc., a manufacturer of optical glass, began operations on February 1 of the current year. During this time, the company produced 900,000 units and sold 800,000 units at a sales price of $12 per unit. Cost information for this year is shown below.
$\begin{array}{l}\text { Production costs }\\\text { Direct materials } & \$ .80 \text { per unit } \\\text { Direct labor } & \$ .70 \text { per unit } \\\text { Variable overhead } & \$ 500,000 \text { in total } \\\text { Fixed overhead } & \$ 450,000 \text { in total }\\\text { Non-production costs }\\\text { Variable selling and administrative }&\$ 30,000 \text { in total }\\\text { Fixed selling and administrative }&\$ 490,000 \text { in total }\end{array}$
Given this information, which of the following is true?

• A) Net income under variable costing will exceed net income under absorption costing by $50,000.
• B) Net income under absorption costing will exceed net income under variable costing by $50,000.
• C) Net income will be the same under both absorption and variable costing.
• D) Net income under variable costing will exceed net income under absorption costing by $60,000.
• E) Net income under absorption costing will exceed net income under variable costing by $60,000.

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Definitions:

Visual Acuity

Visual Acuity is a measure of the clarity or sharpness of a person's vision, often assessed by their ability to recognize letters or numbers at a standardized distance.

Smoking

The act of inhaling and exhaling the smoke produced by burning tobacco in cigarettes, cigars, or pipes, a well-known harmful habit that can lead to various health issues.

Tritanopia

A form of color blindness characterized by an inability to distinguish between blue and green colors.