Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,000 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away, Unit sales were 38,700 scoops Fixed overhead was applied at $0.70 per unit produced. Fixed overhead was underapplied by $2,900. This fixed overhead variance was closed to cost of Goods Sold. There was no variable overhead variance. The results of the year's operations ar as follows (on an absorption-costing basis): Sales (38,700 units @ $20) $774,000 Less: Cost of goods sold 548,160 Gross margin $225,840 Less: Selling and administrative expenses (all fixed) 184,500 Operating income $ 41,340 Required: 1. Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar. $ What is the cost of the ending inventory under variable costing? Round unit cost to five decimal places. Round your final answer to the nearest dollar. 2. Prepare a variable-costing income statement. Round the unit cost to five decimal places, when required. Round your fin answers to the nearest dollar. Use the rounded values in subsequent computations, Snobegon, Inc. Variable-Costing Income Statement For the First Year of Operations Contribution margin Less: Check My Work 2 more Check My Work uses remaining, Previous Nerd nment Score: 53.01% All work saved. Save and Exit Submit Assignment for 2. Prepare a variable-costing income statement. Round the unit cost to five decimal places, when required. Round your fina answers to the nearest dollar. Use the rounded values in subsequent computations. Snobegon, Inc. Variable-Costing Income Statement For the First Year of Operations Contribution margin Less: Operating Income What is the difference between the two income figures