Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,200 plastic snow scocos. Snow scoops are oversized shovel-type sceos that are used to push brow away. Unit sales were 36.000 CODS. Fixed overhead was applied at S0.70 DE unit produced. Fixed overhead was underapplied by $2.700. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overheac variance. The results of the year's operations are as follows (on an absorption-costing boss): Sales (38,500 units a $20) $772.000 Less: Cos. of pouds sold 548,360 Gross margin $223,640 Less: Selling and administrative expenses (all fixed) 85,500 Operating income $ 38,140 Required: 1. Calculate the cost of the firm's ending Inventory under absorption casting, Round unit cost to five decimal places. Round your final answer to the nearest collar. What is the cost of the anding Inventary under variable casting? Round unit cost to flue decimal places. Round your final answer to the nearest dallar. 2. Prepare a variaale coating income statement. Round the unit cast to five decimal places, when required. Round your final answers to the nearest dallar. Use the rounded values in subsequent computations. Snobegon, Inc Variable-Costing Income Statement For the First Year of Operations Contribution margin Operating roome What is the difference between the two income figures