Clayton Company Produces a Single Product

question 68

Multiple Choice

Clayton Company produces a single product.Last year,the company's variable production costs totaled $8,000 and its fixed manufacturing overhead costs totaled $4,800.The company produced 4,000 units during the year and sold 3,600 units.Assuming no units in the beginning inventory:

• A)under variable costing,the units in ending inventory will be costed at $3.20 each.
• B)the net operating income under absorption costing for the year will be $480 lower than net operating income under variable costing.
• C)the ending inventory under variable costing will be $480 lower than the ending inventory under absorption costing.
• D)the net operating income under absorption costing for the year will be $800 lower than net operating income under variable costing.

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