The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit:$38Production Selling and administrative$14Fixed costs per year: Production$140,000Selling and administrative$84,000Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning inventory.The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be:
A. $6,800 less than under absorption costing.
B. the same as absorption costing.
C. $4,000 less than under absorption costing.
D. $6,800 greater than under absorption costing.
Answer: C
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