The following information pertains to Chacon Inc. for last year:

Beginning inventory in units		5,000
Units produced		20,000
Units sold		23,700
Costs per unit:
Direct materials	$8.00
Direct labor	$4.00
Variable overhead	$1.50
Fixed overhead*	$4.15
Variable selling expenses	$3.00
Fixed selling and administrative expenses	$24,300

* Fixed overhead totals $83,000 per year.

Assume that the selling price is $27 per unit.

	Required:
1.	Calculate operating income using absorption costing.
2.	Calculate operating income using variable costing.