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P=&takeAssignmentSessionLocator a&inprogress... * Homework, Chapter 21 eBook 14 Show Me How Calculator Print Item Variable Co
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Answer b: In variable cost operating income only variable cost has been taken into an account where as absorption cost operating income means fixed overhead cost has been taken into an account.

Difference between variable and absorption costs = (Production units - sales units)* fixed cost per unit = ( 1,40,000-1,33,000)×$44 = $3,08,000

So, the difference is $3,08,000 and it has been always note that when unit produced is more than unit sold than it resulted in variable operating income is less than absorption operating income.

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