Kaaua Corporation has provided the following data for its two most recent years of operation:

Selling price per unit	$	83
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials	$	13
Direct labor	$	7
Variable manufacturing overhead	$	4
Fixed manufacturing overhead per year	$	396,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold	$	4
Fixed selling and administrative expense per year	$	72,000

	Year 1	Year 2
Units in beginning inventory	0	2,000
Units produced during the year	12,000	11,000
Units sold during the year	10,000	9,000
Units in ending inventory	2,000	4,000

Which of the following statements is true for Year 2?

Multiple Choice

• The amount of fixed manufacturing overhead deferred in inventories is $534,000

• The amount of fixed manufacturing overhead released from inventories is $78,000

• The amount of fixed manufacturing overhead released from inventories is $534,000

• The amount of fixed manufacturing overhead deferred in inventories is $78,000

• Pungent Corporation manufactures and sells a spice rack. Shown below are the actual operating results for the first two years of operations:

  	Year 1		Year 2
  Units (spice racks) produced		40,000		40,000
  Units (spice racks) sold		37,000		41,000
  Absorption costing net operating income	$	44,000	$	52,000
  Variable costing net operating income	$	38,000		???

  Pungent's selling price and unit variable cost and total fixed cost were the same for both years. What is Pungent's variable costing net operating income for Year 2?

  Multiple Choice

• $48,000

• $50,000

• $54,000

• $56,000