SW Toys started 2020 with no inventories. During the year, their expected and actualproduction was 34,000 units, of which they sold 23,800 units at $80 each. Cost datafor the year is as follows

:Manufacturing costs incurred:

Variable $520,000

Fixed $425,000

Marketing costs incurred:

Variable $162,100

Fixed $ 81,600

Calculate SW Toys' operating income under (1) variable costing and (2) absorption costing. Explain why operating income differs under the two approaches.