Fixed manufacturing costs are $51 per unit, and variable manufacturing costs are $153 per unit. Production was 81,000 units, while sales were 76,140 units. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. b. Determine the difference in variable costing and absorption costing operating income.

Part a.

Yes, variable costing operating income is less than or greater than absorption costing.

Part b.

$247,860

Explanation:

The difference between variable costing operating income and absorption costing operating income lies in the fixed costs deferred in inventory.

The profit in both method is the same if and only if there is no inventory. That means units produced equal units sold (Production = Sales)

The absorption costing method includes fixed manufacturing cost in determining product costs whereas the variable costing method only accounts for variable manufacturing cost.

When the units produced are greater than units Sold (Production > Sales) , Fixed Costs in Inventory increases this means absorption profits will be greater than Variable costing profit as Fixed costs in inventory value reduces cost of sales in absorption costing.

Difference in variable costing and absorption costing operating income.

Difference = (81,000 - 76,140) x $51

                  = $247,860

The managers are well advised to train the workforce in conflict management.
One massive advantage of working in a team is that the employees will be able to cover each other weakness and make them able to accomplish a larger amount of projects within shorter period of time.
But, the downside of working in a team is that occasionally, team members may experience conflict/disagreement with one another that may threaten the productivity of the team if not handled properly.