Huron Chalk company manufactures sidewalk chalk which it sells online by the box at $25 per unit. Huron uses an actual costing system, which means that the actual costs of direct material,direct labor and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year, actual manufacturing overhead is divided by actual production( in units) to compute the application rate. Information for Huron's first 2 years of operations is as follows;

year 1 year 2

Sales in unit 2,500 2,500

Production in units 3000 2000

Production costs:

Variable manufacturing costs $10500 $7000

Fixed manufacturing overhead 21000 21000

Selling and admin expenses:

Variable 12500 12500

Fixed 10000 10000

Required:

1.Reconcile Huron's operating income reported under absorption and variable costing, during each year by comparing the following two amounts on each income statement:

- Cost of goods sold

- Fixed cost ( expensed as a period expense)

2. What was Huron's total operating income across both years under absorption costing and under variable costing?

3. What was the total sales revenue across both years under absorption costing and uner variable costing?