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

There are no work-in-process inventories. Normal activity is 60,000 units. Expected and actual overhead costs are the same.
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 \($32\). Prepare an income statement using:

a. Variable costing

b. Absorption costing

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Beginning inventory, units Units produced 60,000 Units sold 57,400 Variable costs per unit: Direct materials Direct labor $9.00 $6.50 Variable overhead $3.60 Variable selling expenses $3.00 Fixed costs per year: Fixed overhead $234,000 Fixed selling and administrative expenses $236,000