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Jorgensen Company has 10,000 units in its ending inventory. During the year, the company's variable...

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Accounting

Jorgensen Company has 10,000 units in its ending inventory. During the year, the company's variable production costs were $10 per unit and its fixed manufacturing overhead application rate was $5 per unit. The company's net income for the year was $15,000 lower under absorption costing than it was under variable costing. Given these facts, what was the number of units in the beginning inventory? (Assume the company uses normal costing and closes over- and under-applied over directly to COGS, and that the fixed manufacturing overhead application rate is constant from year to year.)

Select one:

a. 11,500 units

b. 8,500 units

c. 13,000 units

d. 7,000 units

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