Easton Pump Companys planned production for the year just ended was 18,300 units. This production level was achieved, and 20,800 units were sold. Other data follow:

Direct material used	$	563,640
Direct labor incurred		285,480
Fixed manufacturing overhead		402,600
Variable manufacturing overhead		177,510
Fixed selling and administrative expenses		301,950
Variable selling and administrative expenses		92,415
Finished-goods inventory, January 1		3,100	units

The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year.

Required:

1. 1. What would be Easton Pump Companys finished-goods inventory cost on December 31 under the variable-costing method? (Do not round intermediate calculations.)

2. 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year?

3. 2-b. By what amount? (Do not round intermediate calculations.)

Easton Pump Company's planned production for the year just ended was 18,300 units. This production level was achieved, and 20,800 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $563, 640 285,480 402,600 177,510 301,950 92,415 3,100 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do not round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. Finished-goods inventory cost $ 394,365 2- Higher operating income method Variable costing 2 Difference in reported income $ 2,018,845 b