Steele Corporation has the following information for January, February, and March: January February March
Units produced 10,000 10,000 10,000
Units Sold 7,000 8,500 10,500
Production costs per unit (based on 10,000 units) are as follows:

Direct materials per unit

$12
Direct labor per unit 8
Variable overhead per unit 6
Fixed overhead per unit 4
Variable selling cost per unit 10
Fixed selling & administrative costs per unit 4
There were no beginning inventories for January, and all units were sold for $50. Costs are stable over the three months. Absorption costing income for March was than variable costing income.

d. $2,000 less

Explanation:

The computation is shown below:

Particulars      January        February             March

Units beg.

inventory              0                 3,000             4,500

Units produced     10,000       10,000           10,000

Units sold             -7,000        -8,500           -10,500

Units ending

inventory               3,000         4,500                  4,000

Now

= $4 × (4,500 - 4,000)

= $2,000

So, here the income arise from absorption costing should be lower than the variable costing as the inventory is reduced  

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.