Lee Company Produces a Single Product

question 20

Multiple Choice

Lee Company produces a single product. At the end of last year, the company had 30,000 units in its ending inventory. Lee's variable production costs are $10 per unit and its fixed manufacturing overhead costs are $5 per unit every year. The company's net operating income for the year was $12,000 higher under variable costing than under absorption costing. Given these facts, the number of units of product in inventory at the beginning of the year must have been:

• A) 28,800 units
• B) 27,600 units
• C) 32,400 units
• D) 42,000 units

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