Hinkle Company uses standard costing. Tim Bartina, the new president of Hinkle Company, is presented with the following data for 2012:

                                    

Required
1. At what percentage of denominator level was the plant operating during 2012?
2. How much fixed manufacturing overhead was included in the 2011 and the 2012 ending inventory under absorption costing?
3. Reconcile and explain the difference in 2012 operating incomes under variable and absorption costing.
4. Tim Bartina is concerned: He notes that despite an increase in sales over 2011, 2012 operating income has actually declined under absorption costing. Explain how this occurred.