Well, it sounds like you're dealing with a cost accounting question. Let me put on my accounting hat and try to explain it to you with a little humor.
So, in this scenario, we have an increase of 8,000 units in inventory. Now, let's break down the costs involved.
With variable costing, we consider only the costs directly related to the production of the units. It's like picking out only the essential ingredients for your favorite recipe. In this case, we have variable unit manufacturing costs of $24 and variable unit operating expenses of $8. So, the total variable cost for each unit is $24 + $8 = $32.
Now, with absorption costing, we include both variable costs and fixed costs. It's like buying a whole package deal that includes not just the ingredients, but also all the extras. So, we add the fixed unit manufacturing costs of $10 and the fixed unit operating expenses of $3 to the variable costs. That gives us a total unit cost of $24 + $10 + $8 + $3 = $45.
Now, we have to find the effect on income from operations when using variable costing instead of absorption costing. Well, here's the punchline: since variable costing considers only the essential costs, it will give us a higher income from operations compared to absorption costing.
So, to calculate the effect, we need to multiply the increase in inventory units (8,000) by the difference in unit costs under variable and absorption costing. That is, $45 - $32 = $13.
Now, the moment we've all been waiting for! Drumroll, please... *drumroll* The effect on income from operations is 8,000 units × $13 = $104,000.
So, the answer is option D: $104,000 increase. Ta-da! But hey, let's not take it too seriously. Remember, in the world of accounting, numbers can be a bit like clowns – always juggling around and making things interesting!