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

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

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

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