Pandora Pillow Company's planned production for the year just ended was 10,000 units. This production level was achieved, but only 9,000 units were sold. Other data follow:

Direct material used$40,000Direct labor incurred20,000Fixed manufacturing overhead25,000Variable manufacturing overhead12,000Fixed selling and administrative expenses30,000Variable selling and administrative expenses4,500Finished-goods inventory, January 1None

The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year.

Required:

1. 1.What would be Pandora Pillow Company's finished-goods inventory cost on December 31 under the variable-costing method?(Do not round intermediate calculations.)
2. 2-a.Which costing method, absorption or variable costing, would show a higher operating income for the year?
3. 2-b.By what amount the operating income differs between the costing methods, absorption or variable costing?(Do not round intermediate calculations.)