Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records:

Sales price per unit ....... $ 103

Direct materials per unit...... $ 50

Direct labor per unit....... $ 16

Variable overhead per unit...... $ 10

Fixed overhead per unit...... $ 23

Fixed selling costs.......... $ 55,000

Variable selling costs....... $180,000

Beginning inventory .....0

Units produced ..........100,000

Units sold .......... 90,000

Required

a. Under absorption costing, what is Regal’s operating income?

b. Under variable costing, what is Regal’s ending Finished Goods Inventory balance?