In its first year of operations, Magna Manufacturers had the following costs when it produced 100,000 and sold 80,000 units of its only product:
|
Manufacturing costs |
Fixed |
$180,000 |
|
Variable |
160,000 |
|
|
Selling and admin. costs |
Fixed |
90,000 |
|
Variable |
40,000 |
How much lower would Magna’s net income be if it used variable costing instead of full absorption costing?
- $36,000
- $54,000
- $68,000
- $94,000