Horizon company has $25 per unit selling price, $8.00 per unit in variable production cost and $1.00 per unit in variable selling and administrative cost. The annual fixed production cost is $400,000. The annual fixed selling and administrative cost is $50,000.

Required:

1. Complete the table below for each year. Assume a FIFO flow.

	2017	2018	2019	2020
Units Produced	120,000	150,000	100,000	100,000
Units Sold	110,000	120,000	140,000	100,000
Manufacturing cost per unit under full absorption costing
Operating income under variable costing
Operating income under full absorption costing
Ending inventory using variable costing ($)
Ending inventory using full absorption costing ($)

2. Explain how and why your results in requirement a above differed with respect to operating income between variable costing and full absorption costing.