• Altoona Valve Company’s planned production for the year just ended was 20,000 units. This production level was achieved, and 21,000 units were sold. Other data follow: Direct material used ....................................................................................................... $300,000 Direct labor incurred ...................................................................................................... 150,000 Fixed manufacturing overhead ......................................................................................................... 210,000 Variable manufacturing overhead ..................................................................................................... 100,000 Fixed selling and administrative expenses ......................................................................................... 175,000 Variable selling and administrative expenses ..................................................................................... 52,500 Finished-goods inventory, January 1 ................................................................................................. 2,000 units The cost per unit remained the same in the current year as in the previous year. There were no work-inprocess inventories at the beginning or end of the year. Required: 1. What would be Altoona Valve Company’s finished-goods inventory cost on December 31 under the variable-costing method? 2. Which costing method, absorption or variable costing, would show a higher operating income for the year? By what amount?