Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows: Variable costs per unit: Direct materials Direct labor Variable overhead Variable selling Fixed costs per year: Fixed overhead Selling and administrative $ 2.85 $ 1.92 $ 1.60 $ 0.90 $180,000 $ 96,000 During the year, Borques produced 200,000 wooden pallets and sold 204,300 at $9 each. Borques had 8,200 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing.