The following information pertains to Brian Stone Corporation: $\begin{array}{lr}
\text { Beginning fixed manufacturing overhead in inventory } & \$ 60,000 \
\text { Ending fixed manufacturing overhead in inventory } & 45,000 \
\text { Beginning variable manufacturing overhead in inventory } & \$ 30,000 \
\text { Ending variable manufacturing overhead in inventory } & 14,250 \
& \
\text { Fixed selling and administrative costs } & \$ 724,000 \
\text { Units produced } & 5,000 \text { units } \
\text { Units sold } & 4,800 \text { units }
\end{array}$ What is the difference between operating incomes under absorption costing and variable costing?
A) $750
B) $7,500
C) $15,000
D) $30,750

Question

Quizplus · Accepted Answer

The difference in operating income between absorption costing and variable costing is due to the fixed manufacturing overhead deferred in inventory. The difference is calculated as the change in fixed manufacturing overhead in inventory, which is $60,000 - $45,000 = $15,000.

The Following Information Pertains to Brian Stone Corporation What Is the Difference Between Operating Incomes Under Absorption Costing