Start Me Up, Inc., manufactures a caffeinated energy drink that sells for $4 each. The results for its first year of operations appear in the table below:

Number of drinks produced ........................................... 52,000
Number of drinks sold ..................................................... 50,000
Direct materials per drink ................................................. $0.55
Direct labor per drink ......................................................... $0.25
Variable manufacturing overhead per drink .................. $0.15
Total fixed manufacturing overhead ........................... $39,000
Total fixed selling and administrative costs ............... $50,000

Required

1. Compute the operating income for the first year under full costing.

2. Compute the operating income for the first year under variable costing.