Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,700 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,800 scoops. Fixed overhead was applied at $0.75 per unit produced. Fixed overhead was underapplied by $2,600. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year's operations are as follows (on an absorption-costing basis): Sales (38,800 units @ $20) Less: Cost of goods sold $776,000 547,160 $228,840 184,500 Gross margin Less: Selling and administrative expenses (all fixed) Operating income $ 44,340 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. Feedback 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 final answers to the nearest dollar. Use the rounded values in subsequent computations. Snobegon, Inc. Variable-Costing Income Statement For the First Year of Operations Sales Less: Variable cost of goods sold Contribution margin Less: Fixed overhead Fixed selling and administrative expenses Operating income Feedback What is the difference between the two income figures