Data table AE Toys started 2020 with no irventories. During the yeat, their expected and actual production was 31,000 units, of which they sold 21,700 units at 550 each. Cost data for the yeat is as folows. (Click the icon to view the cost data.) Calcutate AB Toys' operating income under (1) variable costing and (2) absopption costing Explain wiy operating incorse differs under the two approaches. Begit by calculating AB Toys' operating income under (1) variable cocting (If an input field is not used in the table, leave the input field empty; do not select a label of enter a zerta.) Now calculate AB Toys' operating hoome under (2) absorption costing (if an input field is not used in the tablo, leave the input field empty; do not select a label of enter a zero.) AB Toys started 2020 with no invertaries. During the year, their expected and actival production was 31,000 units, of which thoy sold 21,700 units at 550 each. Cost data for the yi ts as folows. (Click the icon to view the cost data) Calculate AB Toys' operating income under (1) variable costing, and (2) absorption costing. Explain wiy operating incorne dilfers under the fwo approaches Now calculate AB Toys' operating income under (2) absorption costing (it an input fold is not used in the table, leave the input field empty; iso not select a labet or enter a zere) Absorption costing treats foced manulacturing cost as a while variable costing treats it as a AB Toys has unils in ending irventory. Undet absorption costing. these units have a fixed manufacturing Percunit So the tolal fored manufacturing cost in ending irventory under absorption IIA (Cick the icon to viow the cost data.) Calaulate AB Toys' operating income under (1) variable costing, and (2) absorption costing. Explain why operating income diflers under the two approaches Absorpion costing treats fixed manulacturing cost as a While variable costing treats if as a AB Toys has units in ending inventory. Under absorption costing, these units have a fixed manufacturing cost of per unit. So the total fixed manulacturing cost in ending inventory under absorption costing is Since these costs are inventoried under costing. and not expensed as they would be under costing, operating income is under absorption costing by