1. The following information pertains to Brian Stone Corporation:

Beginning fixed manufacturing overhead in inventory	$45,000
Ending fixed manufacturing overhead in inventory	60,750
Beginning variable manufacturing overhead in inventory	$30,000
Ending variable manufacturing overhead in inventory	14,250
Fixed selling and administrative costs	$724,000
Units produced	5,000 units
Units sold	4,800 units

What is the difference between operating incomes under absorption costing and variable costing?

a. $750

b. $7,500

c. $14,000

d. $15,750

e. $30,750

Answer the following question(s) using the information below.

Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:

Direct materials	$45,000
Direct labour	55,000
Variable factory overhead	30,000
Fixed factory overhead	70,000
Total costs	$200,000

Of the fixed factory overhead costs, $30,000 is avoidable.