(Income statements for 2 years, both methods) Edison Digital manufactures palmtop computers. The following data from the company are available for 2000 and 2001:

In addition, selling and administrative fixed costs were $190,000 for both years.
All variances are charged or credited to Cost of Goods Sold.

Prepare income statements under absorption and variable costing for the years ended 2000 and 2001. Reconcile the differences in income between the methods. (Ignore taxes.)

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2000 2001 Selling price per unit $170 $170 Number of units sold 20,000 24,000 Number of units produced 25,000 22,000 Beginning inventory (units) 15,000 20,000 Ending inventory (units) 20,000 Standard costs per unit for 2000 and 2001 were Direct material Direct labor $20.00 60.00 Variable overhead Fixed overhead Variable sales commission 20.00 30.00 (based on budget of $750,000 and normal 20.00 capacity of 25,000 units)