There was no finished goods inventory on July 1, 2008, for Royal Essentials. The company operated the manufacturing facility at 100% of capacity during July. The following data summarize the results for Royal Essentials Inc. for July:

Discuss the differences in the absorption and variable costing income from operations. The input in the box below will not be graded, but may be reviewed and considered by yourinstructor.

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Sales (1,350 cases x $80 per case) Production costs (1,500 cases): $108,000 Direct materials Direct labor Variable factory overhead Fixed factory overhead $18,000 7,500 150 14,100 39,750 Variable selling expenses (1,350 casesx $16 per case 21,600