A company has $25 per unit selling price, $7.00 per unit in variable production cost and $2.00 per unit in variable selling and administrative cost. The annual fixed production cost is $400,000. The annual fixed selling and administrative cost is $50,000.

Complete the table below for each year. Assume a FIFO flow.

2016

Units Produced 120,000

Units Sold 110,000

1- Operating income under variable costing

2- Operating income under absorption costing