1)

Diggs Company incurred the following costs while producing 560 units: direct material: $13 per unit; direct labor: $26 per unit; variable manufacturing overhead: $10 per unit; total fixed manufacturing overhead costs: $11,200; variable selling and administrative costs: $4 per unit; total fixed selling and administrative costs: $7,280. There are no beginning inventories.

What is the operating income using variable costing if 350 units are sold for $190 each?

2)

Dollar Company incurred the following costs while producing 520 units: direct materials, $14 per unit; direct labor, $23 per unit; variable manufacturing overhead, $13 per unit; total fixed manufacturing overhead costs, $8,840; variable selling and administrative costs, $12 per unit; total fixed selling and administrative costs, $5,200. There are no beginning inventories.

What is the operating income using absorption costing if 520 units are sold for $110 each?