o E F G H H K M N Problem 2: Absorption costing and Variable Costing Electra Inc. operated at 100% of capacity during its first month and provided following information: Number of units produced: 10,000 units Production costs for 10,000 units: Direct materials $150,000 Direct labor $50,000 Variable factory overhead $20,000 Fixed factory overhead $10,000 $230,000 Operating expenses: Variable operating expenses $30,000 Fixed operating expenses $5,000 $35,000 Electra sold 8,000 units during the first month at a price of $35 per unit. Required: Using the formats below, calculate A. Income from operations and Ending inventory under the Absorption costing. B. Income from operations and Ending inventory under the Variable costing. Solution: A. Absorption costing Product costs per unit: Sales: COGS: Gross profit: Operating expenses: Income from operations: Ending inventory: A. Variable costing Product costs per unit: Sales: Total variable costs: Contribution margin: Total fixed costs: Income from operations: Ending inventory