es Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,500 units. This production level was achieved, and 20,600 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $545,750 296,000 377,400 188,700 336,700 104,525 2,600 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process Inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods Inventory cost on December 31 under the variable-costing method? (Do not round Intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating Income for the year? 2-b. By what amount? (Do not round Intermediate calculations.) 1. Finished-goods inventory cost 2-a. Higher operating income method 2-b Difference in reported income