The following information pertains to Yellen, Inc., for last year:

There are no work-in-process inventories. Normal activity is 50,000 units. Expected and actual overhead costs are the same.
Required:
1. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income.
2. Assume the selling price per unit is $32. Prepare an income statement

(a) using vari¬
able costing and

(b) using absorption costing.

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Beginning inventory, units Units produced Units sold Ending inventory, units Variable costs per unit: Direct materials Direct labor Variable overhead Variable selling expenses Fixed costs per year: Fixed overhead Fixed selling and administrative 50,000 47,500 2,500 $12.00 3.00 2.10 3.00 $ 80,000 236,000