Outback Corporation manufactures tactical LED flashlights in Brisbane, Australia. The firm uses an absorption costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding Outbacks planned and actual operations for 20x1 follow:

	Budgeted Costs
	Per Unit				Total				Actual Costs
Direct material	$	12.10			$	1,681,900			$	1,585,100
Direct labor		9.30				1,292,700				1,218,300
Variable manufacturing overhead		4.60				639,400				602,600
Fixed manufacturing overhead		4.10				569,900				577,900
Variable selling expenses		7.30				1,014,700				883,300
Fixed selling expenses		7.90				1,098,100				1,098,100
Variable administrative expenses		2.80				389,200				338,800
Fixed administrative expenses		2.70				375,300				381,300
Total	$	50.80			$	7,061,200			$	6,685,400

	Planned Activity				Actual Activity
Beginning finished-goods inventory in units		43,000				43,000
Sales in units		139,000				121,000
Production in units		139,000				131,000

The budgeted per-unit cost figures were based on Outback producing and selling 139,000 units in 20x1. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $8.70 per unit was employed for absorption costing purposes in 20x1. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of the year. The 20x1 beginning finished-goods inventory for absorption costing purposes was valued at the 20x0 budgeted unit manufacturing cost, which was the same as the 20x1 budgeted unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 20x1 was $70.90 per unit. Required: Was Outbacks 20x1 operating income higher under absorption costing or variable costing? Also, compute the following: 1. The value of Outback Corporations 20x1 ending finished-goods inventory under absorption costing. 2. The value of Outback Corporations 20x1 ending finished-goods inventory under variable costing. 3. The difference between Outback Corporations 20x1 reported operating income calculated under absorption costing and calculated under variable costing.