Wilson & Moore Industries makes artificial Christmas trees. The unit costs for producing a tree are:

Direct materials		$23
Direct labor		$16
Variable overhead		$18
Fixed overhead		$5

The company also incurs $2 per tree in variable selling and administrative costs and $4,500 in fixed marketing costs. At the beginning of the year, the company had 820 trees in the beginning Finished Goods Inventory. The company produced 2,220 trees during the year. Sales totaled 1,400 trees at a price of $101 per tree. (a) Based on absorption costing, what was the companys operating income for the year?

(b) Based on variable costing, what was the companys operating income for the year? (c) Assume that in the following year the company produced 2,220 trees and sold 2,870. Based on absorption costing, what was the operating income for that year? Based on variable costing, what was the operating income for that year?

Absorption Costing-

Variable Costing-