For Consumer Lumber what would be the total difference between operating incomes under absorption costing and variable costing?

Question

Quizplus · Accepted Answer

The difference between operating incomes under absorption costing and variable costing is equal to the change in ending inventory value multiplied by the fixed manufacturing overhead per unit. In this problem, the change in ending inventory is 5,000 units (15,000 - 10,000), and the fixed manufacturing overhead per unit is $7 ($280,000 fixed overhead / 40,000 total units produced). Therefore, the total difference in operating incomes is $35,000 ($7 * 5,000 units).

For Consumer Lumber What Would Be the Total Difference Between