Variable and absorption costing, explaining operating-income differences. BigScreen ©

Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual | 4 gperating income, data relating to January, February, and March of 2009 are:

REQUIRED 1. Present income statements for BigScreen Corporation in January, February, and March of 2009 under

(a) variable costing and

(b) absorption costing.
2. Explain the difference in operating income for January, February, and March under variable costing and absorption costing.
LO1

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January February March Unit data: Beginning inventory Production Sales 0 300 300 1,000 800 1,250 700 800 1,500 Variable costs: Manufacturing cost per unit produced $900 $900 $900 Operating (marketing) cost per unit sold 600 600 600 Fixed costs: Manufacturing costs $400,000 $400,000 $400,000 Operating (marketing) costs 140,000 140,000 140,000 The selling price per unit is $3,000.