Worrel Corporation manufactures a single product. The following data pertain to the company's operations over the last two years:
Required:a. Determine the absorption costing net operating income last year.b. Determine the absorption costing net operating income this year.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.

Net Operating Income

The income a company makes from its main business activities before subtracting any costs for interest and taxes.

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant irrespective of the level of production, such as salaries of supervisors and rent for the factory building.