2. Variable CostingProduction Exceeds Sales

Fixed manufacturing costs are $30 per unit, and variable manufacturing costs are $90 per unit. Production was 142,000 units, while sales were 133,480 units.

a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. Variable costing operating income is less than absorption costing.

b. Determine the difference in variable costing and absorption costing operating income. ?

3. Variable CostingSales Exceed Production

The beginning inventory is 6,300 units. All of the units that were manufactured during the period and all the units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $57 per unit, and variable manufacturing costs are $105 per unit.

a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. Variable costing operating income is greater than absorption costing.

b. Determine the difference in variable costing and absorption costing operating income. ?