Variable Costing$-$Sales Exceed Production

The beginning inventory is $14,500$ units. All of the units that were manufactured during the period and all the units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $$8\mathrm{.}20$ per unit, and variable manufacturing costs are $$20$ 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.

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