1. Production costs for 10,000 units sold at $45 per unit:

Direct materials

$20,000

Direct labor

$80,000

Variable overhead

$60,000

Fixed overhead

$90,000

Variable selling and administrative costs

$40,000

Fixed selling and administrative costs

$80,000

Total costs

$370,000

What is the difference in net income between absorption-costing and variable-costing income statements, assuming there is no ending or beginning inventory?

2.