The Following Data Are Available for Brennan Soft Toys Company

Essay

The following data are available for Brennan Soft Toys Company for the year ended September 30,2015.
$\begin{array}{lr}\text { Sales: }&24,000 \text { units at } \$ 50 \text { each }\\\text { Expected and actual production: }&30,000 \text { units }\\\text { Manufacturing costs incurred: }\\\text { Variable: } & \$ 525,000 \\\text { Fixed: } & \$ 372,000 \\\text { Nonmanufacturing costs incurred: } & \\\text { Variable: } & \$ 144,800 \\\text { Fixed: } & \$ 77,400 \\\text { Beginning inventories: } & \text { none }\end{array}$ Required:
a.Determine operating income using the variable-costing approach.
b.Determine operating income using the absorption-costing approach.
c.Explain why operating income is not the same under the two approaches.