The company is considering using either super-variable costing or a variable costing system that assigns $22 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?
A)Variable costing net operating income exceeds super-variable costing net operating income by $427,000.
B)Variable costing net operating income exceeds super-variable costing net operating income by $154,000.
C)Super-variable costing net operating income exceeds variable costing net operating income by $154,000.
D)Super-variable costing net operating income exceeds variable costing net operating income by $427,000.

Question

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The Answer of The company is considering using either super-variable costing or a variable costing system that assigns $22 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?
A)Variable costing net operating income exceeds super-variable costing net operating income by $427,000.
B)Variable costing net operating income exceeds super-variable costing net operating income by $154,000.
C)Super-variable costing net operating income exceeds variable costing net operating income by $154,000.
D)Super-variable costing net operating income exceeds variable costing net operating income by $427,000.

The Company Is Considering Using Either Super-Variable Costing or a Variable