Variable Costing$-$Sales Exceed Production

The beginning inventory is $52,800$ units. All of the units that were manufactured during the period and $52,800$ units of the beginning inventory were sold. The beginning

inventory fixed manufacturing costs are $$14\mathrm{.}70$ per unit, and variable manufacturing costs are $$30$ per unit.

a$.$ Determine whether variable costing operating income is less than or greater than absorption costing operating income.

Variable costing operating income is greater than absorption costing. $$

b$.$ Determine the difference in variable costing and absorption costing operating income.

$

Check My Work

a$.$ Recall that when units manufactured exceed the units sold, the variable costing operating income will be less than it is for absorption costing.

b$.$ Sold units of the beginning inventory $x$ fixed costs per unit $=$ difference between variable and absorption costing operating income