Weng Laboratories is a relatively small company that produces widgets and started operations only a few years ago. The owner is considering expanding operations and has even considered introducing a certain amount of automation. Unfortunately, the owner of Weng Laboratories is not very knowledgeable about cost management. Production data for Weng for Year 1 and Year 2 is as follows:

	Year 1		Year 2
Sales	$100,000		$110,000
Variable Production Costs	20,000		25,000
Fixed Production Costs	30,000		35,000
Variable S&A Expenses	15,000		20,000
Fixed S&A Expenses	20,000		25,000
Beginning Finished Goods Inventory	15,000		35,000
Ending Finished Goods Inventory Absorption Costing	35,000		50,000
Ending Finished Goods Inventory Variable Costing	25,000		35,000

1. If Weng adopts absorption costing, which costs are product costs and which costs are period costs? If Weng adopts variable costing, which costs are product costs and which costs are period costs?

2. If Weng adopts absorption costing, what is operating income for Year 1 and Year 2?

3. If Weng adopts variable costing, what is operating income for Year 1 and Year 2?

*****I NEED ANSWER FOR "A."*****