Chapter 6, Problem 6.56BE

1.

To determine

To prepare: The income statements for the year using absorption costing and the variable costing.

To find:

a. product cost per unit using absorption costing

b. product cost per unit using variable costing

c. ending inventory balance using absorption costing

d. ending inventory balance using variable costing

e. cost of goods sold using absorption costing

f. cost of goods sold using variable costing

g. operating income using absorption costing

h. operating income using variable costing

2.

To determine

To find: The reason for the difference in operating income under absorption costing method and the variable costing method.