Question

Last year, Stephen Company had 20,000 units in its ending inventory.

During the year, Stephen's variable production costs were $12 per
unit. The fixed manufacturing overhead cost was $8 per unit in the
beginning inventory. The company's net income for the year was $9,600
higher under variable costing than it was under absorption costing.
Given these facts, the number of units of product in the beginning
inventory last year must have been:
a. 21,200.
b. 19,200.
c. 18,800.
d. 19,520

Answer 1

D) 19,520

Step-by-step explanation:

The company uses a last-in-first-out (LIFO) inventory flow assumption. Given these facts, the number of units of product in the beginning inventory last year must have been:D) 19,520