LO7. How does operating income differ between variable costing and absorption costing? a) ABC Company had the following costs: Direct materials = $10 per unit Direct labor = $5 per unit Variable manufacturing overhead = $2 per unit Fixed manufacturing overhead = $1,000 Variable selling and administrative = $3 per unit Fixed selling and administrative = $2,000 Selling price per unit = $100 Units produced and sold is 1,000 units i) Using the absorption costing method, the gross profit is: ii) Using the variable costing method, the contribution margin is