Reconsider Exhibits 13-3 and 13-4, pages 542 and 543. Suppose that in 20X1 production was 15,500 computers instead of 14,000 computers, and sales were 15,000 computers. Also assume that the net variances for all variable manufacturing costs were $18,000, unfavorable. Also assume that actual fixed manufacturing costs were $1,560,000.

1. Prepare income statements for 20X1 under variable costing and under absorption costing. Use a format similar to Exhibits 13-8 and 13-9, on page 551 .

2. Explain why operating income was different under variable costing and absorption costing. Show your calculations.