A company with fixed manufacturing costs of $500,000 produces 100,000 units in 2

Question

A company with fixed manufacturing costs of $500,000 produces 100,000 units in 2008 and 125,000 units in 2009. The company sells 90,000 units each in 2008 and 2009. Other costs and selling price are unchanged for 2008 and 2009. Which of the following would be most correct?

     A     Variable costing income would be greater in 2009 than in 2008

     B     Full costing income would be greater in 2009 than in 2008

     C     Variable costing income will be the same in 2008 and 2009

     D     both B and C are correct.

Explanation / Answer

D both B and C are correct.

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