Variable Costing and Absorption Costing

Beginning inventory in units: 0

Units produced: 4,800

Units sold: 4,000

Sales: $400,000

Direct material cost (unit level or variable): $96,000

DL and variable MOH cost used: $48,000

Fixed MOH costs: $72,000

Fixed general and admin costs: $80,000

Required:

1. Use the information below and prepare operating income using Variable Costing & Absorption Costing

2. Reconcile the income prepared under Variable Costing and Absorption Costing