On March 31, the end of the first month of operations, Brass Company's absorption costing accounting system contained the following information:

Units Sold	20,000
Sales Price	$72.00
Total Cost of Goods Manufactured	$1,200,000
Total Selling & Admin. Expenses	$85,000
Units in Ending Inventory	5,000
Balance of Ending Inventory	$240,000
Fixed Manufacturing Costs	$225,000
Fixed Selling & Admin. Expenses	$60,000

Required:

A) The balance of Ending Inventory for absorption costing is given. Determine the Ending Inventory balance using variable costing(Show your work).

B) Prepare an Absorption Costing Income Statement down to the Operating Income level.

C) Prepare a Variable Costing Income Statement down to the Operating Income level.

D) Explain why the operating incomes in (B) and (C) differ and where that difference is accounted for within the financial staements prepared for external users.