Comparing Operating Profits. Mark Silber & Associates produces a product selling for $7 per unit; 100,000 units were produced and 80,000 units were sold during the year. The company had no inventory at the beginning of the year. Data for the year were as follows: Questions: 1. What is the operating profit using variable costing? 2. What is the operating profit using absorption costing?

Fixed Costs Variable Costs 0 $1.50 per unit produced Direct materials Direct labor 0 $1.00 per unit produced Factory overhead $150,000 $0.50 per unit produced Administrative $80,000 $0.50 per unit sold