The following data were provided by Trusty Corp., which produces a single product:
|
|
Year 1 |
Year 2 |
Year 3 |
|
Units produced |
6,000 |
7,000 |
5,000 |
|
Units sold |
6,000 |
6,000 |
6,000 |
The selling price per unit, variable costs per unit, and total fixed costs are the same for each year.
Taking the three years together, one would expect total net operating income to be:
A) the same under either absorption or variable costing.
B) higher under absorption costing than under variable costing.
C) lower under absorption costing than under variable costing.
D) none of these.