Variable costing versus absorption costing The following information was drawn from the records of Antitum Company:

During the most recent month Antitum produced 4,000 units of product and sold 3,800 units of product at a sales price of $49 per unit.
Required

a. Prepare an income statement for the month using absorption costing.

b. Prepare an income statement for the month using variable costing.

c. Explain why a company might use one type of income statement for external reporting and a different type for internal reporting.