Montana Industries has the following costs for the year just ended:

Beginning variable manufacturing overhead in inventory$36,500

Beginning fixed manufacturing overhead in inventory67,000

Ending variable manufacturing overhead in inventory$15,650

Ending fixed manufacturing overhead in inventory48,500

Fixed selling and administrative costs$738,000

Units produced5,300 units

Units sold4,900 units

What is the difference between operating incomes under absorption costing and variable costing?

Multiple Choice

• $2,850.
• $18,500.
• None of the answers is correct.
• $39,850.
• $28,500.