Vision Tester, Inc., a manufacturer of optical glass, began operations on February 1 of the current year. During this time, the company produced 900,000 units and sold 800,000 units at a sales price of $12 per unit. Cost information for this year is shown in the following table:Production costs Direct materials$0.80per unitDirect labor$0.70per unitVariable overhead$500,000in totalFixed overhead$450,000in totalNon-production costs Variable selling and administrative$30,000in totalFixed selling and administrative$490,000in totalGiven this information, which of the following is true?
A. Net income under variable costing will exceed net income under absorption costing by $50,000.
B. Net income will be the same under both absorption and variable costing.
C. Net income under absorption costing will exceed net income under variable costing by $50,000.
D. Net income under variable costing will exceed net income under absorption costing by $60,000.
E. Net income under absorption costing will exceed net income under variable costing by $60,000.
Answer: C
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