1.1 7 Exercise 8-23 Absorption and Variable Costing (LO 8-1, 8-4) Pandora Pillow Company's planned production for the year just ended was 21,600 units. This production level was achieved, but only 18,800 units were sold. Other data follow: points 03:47:02 eBook References Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $660,960 326,160 477,360 209,520 375,840 115,560 None The cost per unit remained the same in the current year as in the previous year. There were no work-in-process Inventories at the beginning or end of the year. Required: 1. What would be Pandora Pillow Company's finished-goods Inventory cost on December 31 under the variable-costing method? (Do not round Intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating Income for the year? 2-b. By what amount? (Do not round Intermediate calculations.) 1. 2-a. Finished-goods inventory cost Higher operating income method 2-b. Difference in reported income