Pacific Sports, Inc. makes surf boards. Following are inventory and cost figures relative to the year ended June 30 2013: Beginning inventory 1,000 units Produced 10,000 units Sold 8,000 units Sales price per unit $500 Variable production costs per unit $200 Fixed production costs unit $100 SG&A Expenses $1,000,000 Required: 1. Compute the operating income using the absorption method. 2. Compute the operating income using the variable costing method. 3. Reconcile the difference. 4. Why might a company choose to use variable costing for management purposes?