The following information pertains to Petruchio, Inc., for last year:

There are no work-in-process inventories. Normal activity is 120,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.
Required:
1. How many units are in ending inventory?
2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income.
3. Assume the selling price per unit is $29. Prepare an income statement using

(a) variable costing and

(b) absorption costing.LO1

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Beginning inventory, units 1,400 Units produced 120,000 Units sold 118,000 Variable costs per unit: Direct materials Direct labor $7.00 $10.50 Variable overhead $3.60 Variable selling expenses $2.10 Fixed costs per year: Fixed overhead $234,000 Fixed selling and administrative expenses $236,000