A Company shows the following unit costs for its product:

Direct materials $40

Direct labor 30

Variable overhead 2

Fixed overhead 5

A started the year with 8,000 units in inventory, produced 50,000 units during the year, and sold 55,000 units. The value of ending inventory is

a. greater under variable costing than absorption costing.

b. greater under absorption costing than variable costing.

c. the same under both variable and absorption costing.

d. There is no ending inventory.

e. This situation cannot happen.

Answer rating: 100% (QA)

B Greater under absorption costing than variable costing Reas... View the full answer