16. At XLT Inc., variable costs are $80 per unit, and fixed costs are $40,000. Sales are estimated to be 4,000 units.

a. How much would absorption costing operating income differ between a plan to produce 8,000 units and a plan to produce 10,000 units?

b. How much would variable costing operating income differ between the two production plans?

17. On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

	Units
Production	50,000
Sales ($18 per unit)	(42,000)
Inventory, January 31	8,000
Manufacturing costs:
Variable	$575,000
Fixed	80,000
Total	$655,000
Selling and administrative expenses:
Variable	$ 35,000
Fixed	10,500
Total	$ 45,500

a.	Prepare an income statement using absorption costing.
b.	Prepare an income statement using variable costing.