Final answer:
The difference between operating incomes under absorption costing and variable costing for the given scenario is $2,400, which is due to the deferral of fixed manufacturing overhead in unsold inventory under absorption costing.
Step-by-step explanation:
The difference between operating incomes under absorption costing and variable costing for Brian Stone Corporation involves how fixed manufacturing overheads are treated. Under absorption costing, fixed manufacturing overhead is allocated to both sold and unsold units, so it is partially included in ending inventory. With variable costing, this overhead is expensed in the period it was incurred, so it’s not included in inventory costs.
To calculate the difference, we start with the change in inventory level. Since there are 200 unsold units (5,000 produced - 4,800 sold), the fixed overhead cost per unit is the total fixed overhead divided by the number of units produced, which is $60,000 / 5,000 units = $12 per unit. Therefore, the fixed manufacturing overhead deferred in inventory is 200 units * $12/unit = $2,400.
Under absorption costing, the operating income is higher by this deferred fixed manufacturing overhead amount since these expenses are not being recognized until the product is sold. Under variable costing, however, the entire fixed manufacturing overhead is expensed, making the income lower by $2,400.