Question: Chamiching makes hacksaw blades. Inventory values are determined using the first in, first out (FIFO) method. Production and sales data for the first three years

Chamiching makes hacksaw blades. Inventory values are determined using the first in, first out (FIFO) method. Production and sales data for the first three years appear below.

Hacksaw blades	Sold	Produced
Yr 1	18,000	22,000
Yr 2	25,000	23,000
Yr 3	37,000	35,000

	Sales price	Full cost
Yr 1	$10.00	$6.00
Yr 2	$11.00	$6.60
Yr 3	$12.00	$7.60

In the first year, variable costs accounted for half of the full costs. Total fixed production costs increased each subsequent year by 20%, as a result of step-fixed costs and a general inflationary price increase. For Chamiching, which of the following is true?

Group of answer choices

Variable costing income (VCI) exceeds full costing income (FCI) every year

VCI exceeds FCI in Yrs 1 and 2 only

VCI exceeds FCI in Yrs 2 and 3 only

VCI never exceeds FCI

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