Fixed costs are $50 per unit, and variable costs are $125 per unit. Production was 130,000 units, while sales were 125,000 units. Determine (a) whether variable costing operating income is less than or greater than absorption costing operating income and (b) the difference in variable costing and absorption costing operating income.

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The Answer of Fixed costs are $50 per unit, and variable costs are $125 per unit. Production was 130,000 units, while sales were 125,000 units. Determine (a) whether variable costing operating income is less than or greater than absorption costing operating income and (b) the difference in variable costing and absorption costing operating income.

Fixed Costs Are $50 Per Unit, and Variable Costs Are