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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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Answer #1
A.28800
answered by: gillian
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Answer #2
12,000/5= 2,400 units
The company must have sold more than it produced since variable costing income was was higher than absorption costing, so the answer is 30,000+2,400=32,400. C
answered by: Skele
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Answer #3
A.28800
answered by: douglas
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Answer #4
B. 27,600 units
answered by: christopher
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