The beginning inventory is 8,700 units. All of the units that were manufactured during the period and 8,700 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $48 per unit, and variable manufacturing costs are $103 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. Feedback 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
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