2. VX Corporation began its operations on January 1, 2021. It produces a single product that sells for P13.5 per unit. The Company uses actual (historical) cost system. During 2021, 150,000 units were produced and 135,000 units were sold. There was no work-in-process inventory at December 31, 2021

Manufacturing costs and selling and administrative expenses for 2021 were as follows:

Fixed Cost

Variable Cost

Raw Materials - 3.50 per unit produced Direct Labor - 2.50 per unit produced Factory Overhead 195,000.00 1.00 per unit produced Selling and administrative 140,000.00 1.20 per unit sold

335,000.00 8.20

Questions

a. What amount would X corporation's operating income be for 2021 using variable costing method

b. What amount would X corporation's operating income be for 2021 using the absorption costing method

c. The cost of ending inventory under the (1) Absorption and (2) Variable costing would be