Absorption Costing: The absorption costing is a method used to allocate the fixed manufacturing overhead by a company. It allocates these overheads based on the inventory produced and inventory sold. It is based on the approach that the unsold inventory also consist some fixed manufacturing overhead incurred during a period. Variable Costing: The variable costing is a method used to allocate the fixed manufacturing overhead by a company. It allocates these overheads to the period of production and not to the inventory left unsold or ending inventory. To identify: The operating income from absorption costing.

Step 1: Understanding Absorption Costing and Variable Costing Absorption costing is a method used by companies to allocate fixed manufacturing overhead. It allocates these overheads based on the inventory produced and inventory sold. This method considers that the unsold inventory also includes some fixed manufacturing overhead incurred during a period. On the other hand, variable costing is a method used by companies to allocate fixed manufacturing overhead. It allocates these overheads to the period of production and not to the unsold or ending inventory. Step 2: To identify the operating income from absorption costing The solution provides a table showing the computation of operating income from absorption costing. The operating income from absorption costing is $440,000. Step 3: Working Note To compute the fixed manufacturing overhead per unit, we need to perform the following calculation.