KM Toys started 2017 with no inventories. During the year, their expected and achun production was 265,000 units, of which they told 20,000 units at $60 each. Cost data for the year in as follow Click the icon to view the cost data) Calculate KM Toys operating income under (a) variable costing, and (b) abnorption conting: Explain why operating income for under the two approaches Begin by calculating KM Toys operating Income under (a) variable costing of a bar is not und in the table to the box ompey, do not select a inbet or enlar azaro) Revenues $ 1.200,000 Variable cost of goods sold 456.000 Vwriable marketing costs 135.500 Contribution margin $ 60B 400 Datable Ford manufacturing costs 320,000 Fixed marketing 78.200 210,200 Operating Income 5 Manufacturing costs mourred Variable $570,000 Now calculate KM Toys 's operating income under D) sorption costing of or antero Food 5 320.000 Reves 3 1,200,000 Marketing costs incurred Cost of goods sold 712,000 Variable 5 136,600 5 78.200 Gross margin 488,000 Vacation 135,000 Print Dane Feed marketing costs 78.200 5 274200 Operating income Choose from any list or enter any number in the input folds and then click Check Answer KM Toys started 2017 with no inventories. During the year, their expected and actual production was 25,000 units, of which they sold 20,000 units at $60 each. Cost (Click the icon to view the cost data) Calculate KM Toys operating Income under (n) varlable costing, and (b) absorption conting. Explain why operating Income differs under the two approaches Contribution margin 608,400 Fixed manufacturing costs 320,000 Fund marketing costs 78,200 210.200 Operating income Now calculato KM Toys 's operating income under (b) absorption costing a box is not used in the table, teave the box amply, do not select a label or enter a zero Revenues 1.200,000 Cost of goods sold 712,000 Gross margin Variable marketing costs Faxed marketing costs Operating income 488.000 135,600 78,200 274,200 Absorption costing treats fixed manufacturing cost as a product cost while variable costing treats it as a period cost KM Toys has units in ending inventory. Under absorption costing, these units have a fixed manufacturing cost of $ per unit. So the total fixed manufacturing cost in ending inventory under absorption costing is s Since these costs are inventorind under absorption costing, and not expensed as they would be under variable costing operating income is higher under absorption costing by $ Choose from any list or enter any number in the input fields and then click Check