Pinellas Pillow Companys planned production for the year just ended was 21,400 units. This production level was achieved, but only 18,000 units were sold. Other data follows:

Direct material used	$	624,880
Direct labor incurred		327,420
Fixed manufacturing overhead		455,820
Variable manufacturing overhead		233,260
Fixed selling and administrative expenses		357,380
Variable selling and administrative expenses		97,370
Finished-goods inventory, January 1		None

There were no work-in-process inventories at the beginning or end of the year.

Required:

1.	What would be Pinellas Pillow Companys finished-goods inventory cost on December 31 under the variable-costing method? (Do not round your intermediate calculations.)

2-a.

Which costing method, absorption or variable costing, would show a higher operating income for the year?

	Absorption costing
	Variable costing

2-b.	By what amount? (Do not round your intermediate calculations.)