Consider the following data:

Sales: 12,000 units at $17 each
Actual Production: 15,000 units
Expected volume of production: 18,000 units
Manufacturing costs incurred
Variable: $120,000
Fixed: 63,000
Nonmanufacturing costs incurred
Variable: $24,000
Fixed: 18,000

1) Determine operating income, assuming the firm uses the variable-costing approach to product costing.

2) Assume that there is no January 1, 20X7 inventory; no variances are allocated to inventory; and the firm uses a “full absorption” approach to product costing. Compute a) the cost assigned to December 31, 20X7 inventory and b) operating income for the year ended December 31, 20X7.

We don't do homework. Usually people are more resourceful and don't copy the assignment word for word.

Ok, thank you, was hoping that I could get help undrstanding it better since my teacher is no help and the text is a little confusing. My mistake!

Post what you THINK the answer is and someone will come along and help you. It's the "start from the beginning to ending" that "usually" doesn't happen.