@A1, I came accross this question using the Roger Test Bank.
Here is the explanation for the question
“Under absorption costing, inventory would include an allocation of fixed manufacturing overhead while, under variable costing, inventory would include no fixed costs. As a result, inventory, current assets, and total assets would all be higher under absorption costing than under variable costing. With higher total assets, stockholders' equity would be higher as well. Since current assets are greater under absorption costing, the current ratio would be greater than under variable costing. With beginning and ending inventory remaining unchanged at 5,000 units, profit would be the same under variable and absorption costing. Since absorption costing would have a higher stockholders' equity amount, the return on stockholders' equity would be lower for absorption than for variable costing.”
Also, I would give the AICPA practice test a shot. I did so just to take a look at the MCQs, none of the questions seemed insurmountable (though there was no IT; my Achilles heel). The SIMS were pretty reasonable as well.
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