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	$	12.30			$	1,648,200			$	1,512,900
Direct labor		9.20				1,232,800				1,131,600
Variable manufacturing overhead		4.90				656,600				602,700
Fixed manufacturing overhead		4.60				616,400				627,400
Variable selling expenses		7.70				1,031,800				900,900
Fixed selling expenses		7.50				1,005,000				1,005,000
Variable administrative expenses		2.10				281,400				245,700
Fixed administrative expenses		3.00				402,000				411,000
Total	$	51.30			$	6,874,200			$	6,437,200

	Planned Activity				Actual Activity
Beginning finished-goods inventory in units		42,000				42,000
Sales in units		134,000				117,000
Production in units		134,000				123,000

The budgeted per-unit cost figures were based on Outback producing and selling 134,000 units in 20x1. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $9.50 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 $70.60 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.